DSA president, Alison Jimenez, authored an op-ed entitled, “A strategic bitcoin reserve raises real national security concerns.” The op-ed was published in American Banker on January 22, 2025.
“Exploding pagers, the FBI secretly operating a cellphone platform and a Chinese state-sponsored hack of the U.S. Treasury Department computers. These supply chain attacks and cyber operations may sound like fiction out of a spy novel but are today’s national security reality.”
Bitcoin Strategic Reserve & National Security
Supply Chain Risks
The op-ed discussed supply chain risks posed by bitcoin mining rigs. Rigs are almost exclusively produced by Chinese firms, with one company accounting for 90% of the market. Rigs are a single point of failure.
Cyber Risks
Cyber risks include:
- backdoors / vulnerabilities from rig firmware that can be exploited by any number of bad actors,
- the concentration of the majority of bitcoin computing power by Chinese-operated mining pools.
National Security Risks
Possible national security risks include the CCP using supply chain attacks and/or cyber operations to:
- knock American miners offline,
- overwhelm the U.S. power grid,
- reverse or block U.S. strategic bitcoin reserve transactions
Executive Order & National Digital Asset Stockpile
Ms. Jimenez’ op-ed was published one day before the Executive Order: Strengthening American Leadership in Digital Financial Technology was issued.
The EO mandated:
“The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts…
On issues affecting the national security, the Working Group shall consult with the National Security Council.”
The op-ed concludes:
Put simply, a bitcoin strategic reserve relying on the current state of bitcoin infrastructure could endanger national security by placing China in de facto control of American reserves.
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