VanEck head of digital assets research, Matthew Sigel, recently proposed a revolutionary idea to US lawmakers at the 2025 Bitcoin Conference in Las Vegas. Sigel suggested implementing a royalty system on domestic Bitcoin mining to help the federal government accumulate BTC for its strategic reserve.
Sigel outlined two main channels through which the reserve could grow. The first option involves executive action, with an initial $100 million allocation through the Exchange Stabilization Fund. However, Sigel cautioned that larger purchases may face legal challenges. The second, more sustainable path would be to incorporate funding language into Congress’s annual budget-reconciliation process, requiring only 51 votes in the Senate.
In addition to direct allocations, Sigel recommended that Congress insert small amendments into every bill, mandating miners to transfer a portion of block rewards to the Treasury. This proposal comes in response to President Donald Trump’s executive order in March establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile without new taxpayer spending.
One of the key elements of Sigel’s proposal is the implementation of a mining royalty system. Miners would supply coins to the reserve, rather than taxpayers, through this system. Sigel suggested that miners who convert waste methane into electricity should receive tax relief, while Washington collects a royalty. This approach not only helps clean up the environment but also diversifies national reserves without federal spending.
Under the proposed royalty system, energy producers could install mobile data-center rigs to convert methane into electricity, earning block rewards tax-free. Miners would then transfer a percentage of these rewards, potentially single digits, directly to the Treasury’s reserve wallet. Sigel believes that pilot programs could refine royalty rates and compliance rules.
To bring this proposal to fruition, Sigel called for bipartisan co-sponsors to embed royalty language in energy, defense, and appropriations bills. He drew parallels to federal oil-and-gas royalties and urged state officials to expedite permits for miners that agree to federal royalty contracts. By acting swiftly, the US could accumulate BTC within current fiscal limits and prepare the reserve for the next budget cycle.
In conclusion, Sigel’s proposal presents an innovative solution to fund a BTC reserve without burdening taxpayers. By leveraging mining royalties, the US can not only strengthen its strategic reserves but also promote environmental sustainability in the cryptocurrency mining industry.