Can the US Dollar Change? Investors Eye the American Reserve Modernization Act 

The movement of the US dollar, Fed policy, and the American Reserve Modernization Act are now on investors' radar. On September 16, 2026, the Federal Reserve raised its benchmark interest rate to 3.75%-4%, while the House Financial Services Committee discussed H.R. 8957, a bill that regulates the establishment of the Strategic Bitcoin Reserve.

These developments do not mean Bitcoin will replace the US dollar. ARMA focuses more on how the US government manages the Bitcoin already in its possession.

Key Takeaways

• ARMA pushes for the establishment of a Strategic Bitcoin Reserve in US federal law.
• Bitcoin in the reserve is intended to be held long-term for up to 20 years.
• ARMA does not replace the dollar, but it could change the US strategy in managing reserve assets.

What Is the American Reserve Modernization Act?

The American Reserve Modernization Act, or ARMA, is H.R. 8957, introduced in the US House of Representatives on May 21, 2026. The bill aims to provide a legal basis for the Strategic Bitcoin Reserve while increasing transparency of the government's Bitcoin holdings.

One of its important provisions is a holding period for Bitcoin of up to 20 years. Bitcoin placed in the reserve cannot be sold, exchanged, or liquidated during that period under the bill's provisions.

ARMA also distinguishes Bitcoin from other digital assets. Bitcoin will be placed in the Strategic Bitcoin Reserve, while the government's non-Bitcoin digital assets are managed through the Digital Asset Stockpile.

The bill does not require the government to use taxes or new debt to buy Bitcoin. Its focus is on finding budget-neutral mechanisms for adding BTC.

On September 16, 2026, H.R. 8957 was placed on the markup agenda of the House Financial Services Committee and was subsequently reported out of committee. However, ARMA still has to go through the next legislative stages before it can become law.

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Why Is ARMA Linked to the US Dollar?

ARMA's relationship with the US dollar is indirect. The bill does not eliminate the dollar's role as the primary currency in the American financial system or designate Bitcoin as its replacement.

Investor attention arose because the US government is starting to include Bitcoin in discussions about strategic assets. If the Bitcoin reserve has a permanent legal basis, BTC's position in the government's financial strategy could become clearer.

This change is also taking place as US monetary policy becomes a market concern.

The Federal Reserve on September 16 raised its benchmark interest rate by 25 basis points to 3.75%-4%. This policy can affect yields on dollar-based assets, capital flows, stock markets, Treasuries, and crypto assets.

According to a Reuters report, the DXY dollar index then rose to around 100.33, its highest level since late July. This condition shows that dollar strength remains an important part of market dynamics when Fed policy is tightened.

Therefore, ARMA's developments cannot be read in isolation. Investors still need to pay attention to interest rates, inflation, Treasuries, and DXY movements.

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Impact of ARMA on Investors

For the crypto market, one of the most watched impacts is the possibility of reduced selling pressure from Bitcoin held by the US government.

If the long-term holding rule is implemented, BTC entering the Strategic Bitcoin Reserve will not easily return to the market. This condition could change investor perceptions regarding potential government Bitcoin sales.

ARMA also regulates transparency mechanisms through Proof-of-Reserve and third-party audits. These mechanisms can help the public monitor the amount of Bitcoin in government possession.

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However, investors still need to distinguish between policy impact and price movement. ARMA does not guarantee Bitcoin price increases because the crypto market is still influenced by global liquidity, interest rates, risk sentiment, and economic conditions.

For the US dollar, the impact is more limited. The dollar's role remains influenced by US economic fundamentals, Federal Reserve policy, the Treasury market, and global confidence in the US financial system.

For Indonesian investors trading crypto assets, these US policy developments can be one of the external factors to monitor.

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Conclusion

The American Reserve Modernization Act brings Bitcoin closer to the US Strategic Bitcoin Reserve legal framework and opens the possibility of more permanent management of government BTC. 

This policy does not yet threaten the US dollar's position, but it shows a change in the American government's strategy toward digital assets. Investors still need to view ARMA's developments alongside Fed policy, DXY, Treasuries, inflation, and US economic conditions.

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FAQ

What is the American Reserve Modernization Act?

ARMA is H.R. 8957, a US bill that regulates the establishment of the Strategic Bitcoin Reserve and the management of government Bitcoin.

Will ARMA replace the US dollar with Bitcoin?

No. ARMA regulates Bitcoin as a strategic reserve asset without designating BTC as a replacement for the dollar.

How long is Bitcoin held in the Strategic Bitcoin Reserve?

The bill establishes a holding period of up to 20 years for Bitcoin placed in the reserve.

Has ARMA become law?

Not yet. The bill has passed discussion in the House Financial Services Committee, but it still has to go through the next legislative process.