VanEck Proposes Mining Royalty System to Boost US Bitcoin Reserve

VanEck’s head of digital assets, Matthew Sigel, has proposed that building a permanent US strategic Bitcoin reserve would likely require targeted legislation rather than executive action. Speaking at Bitcoin 2025 in Las Vegas, Sigel suggested that the most viable path forward may involve inserting Bitcoin mining incentives into the congressional budget reconciliation process. He argued that the most effective path to growing a US strategic Bitcoin reserve would be through targeted amendments to congressional budget legislation. These could include tax credits for mining companies that use methane gas and other incentives aimed at encouraging miners to share a portion of their mined BTC with the federal government.

Sigel highlighted the limitations of executive actions in achieving this goal, stating that executive action would likely prompt lawsuits, especially for amounts over $100 million. He suggested starting with a smaller amount, perhaps in the Exchange Stabilization Fund for $100 million. US President Donald Trump established the US Bitcoin Strategic Reserve through a March 7 executive order, which allows the US government to acquire Bitcoin through budget-neutral strategies or asset forfeiture. This has prompted a range of different ideas on how to add to the government’s stockpile of nearly 200,000 BTC.

Lawmakers and officials have pitched different ideas to grow the strategic Bitcoin reserve. Wyoming Senator Cynthia Lummis proposed converting a portion of the gold certificates held by the US Treasury to Bitcoin. This would allow the US government to purchase more Bitcoin without incurring a cost to the taxpayer. Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, echoed this idea, calling on the US Treasury to revalue its gold holdings and convert a portion of those gains to Bitcoin. This strategy would also be budget-neutral.

VanEck, a prominent investment management firm, has proposed a novel approach to bolster the United States' strategic Bitcoin reserve. The proposal suggests implementing a mining royalty system that would allow the U.S. to accumulate Bitcoin in a budget-neutral manner. This concept includes tax exemptions for miners who utilize waste methane, a byproduct of oil and gas production, as an energy source. The idea is to incentivize environmentally friendly mining practices while simultaneously growing the nation's Bitcoin holdings.

The proposal comes at a time when there is growing interest in the U.S. Congress regarding Bitcoin and its potential role in the national economy. Senator Cynthia Lummis, along with five other Republican senators, reintroduced legislation in March aimed at adding up to 1 million BTC to the U.S. Treasury over a five-year period. This bill underscores the bipartisan support for integrating Bitcoin into the country's financial strategy.

The Senate has also advanced the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS), a bill that mandates stablecoins to be fully backed by reserves. This legislation is part of a broader effort to regulate the cryptocurrency space and ensure its stability and security. The advancement of this bill indicates a growing recognition of the importance of digital assets in the financial landscape.

VanEck's proposal for a mining royalty system is a strategic move that aligns with the broader legislative efforts to integrate Bitcoin into the U.S. economy. By offering tax exemptions to miners who use waste methane, the proposal not only supports environmentally sustainable practices but also provides a mechanism for the government to acquire Bitcoin without incurring additional costs. This approach could serve as a model for other countries looking to build their Bitcoin reserves in an environmentally and fiscally responsible manner.

The introduction of these legislative measures and proposals reflects a shift in the U.S. government's stance on Bitcoin. From initially viewing it with skepticism, there is now a growing acknowledgment of its potential benefits. The proposed mining royalty system, along with the legislation to add Bitcoin to the U.S. Treasury, signals a more proactive approach to integrating digital assets into the national economy. This shift could have significant implications for the future of Bitcoin and its role in global finance.