U.S. Military Confirms Bitcoin Node Operations as Multiple Nations Adopt Crypto for Statecraft

Gate News message, April 26 — Admiral Samuel Paparo, Jr., who leads U.S. forces across the Indo-Pacific, told a Senate panel that Bitcoin matters to national security. The Pentagon is running its own Bitcoin node and conducting operational tests to secure and protect networks using the Bitcoin protocol, Paparo confirmed at a House hearing—the first public acknowledgment by the military.

The admission reflects a broader geopolitical shift. Iran is now accepting Bitcoin as payment for ships passing through the Strait of Hormuz. Taiwan is weighing Bitcoin as a reserve asset in case China moves against its finances. Russia announced last week it will accept Bitcoin for international trade starting in July. What was once a fringe digital currency is increasingly being treated as a tool of statecraft.

China’s position is the most complicated. Beijing banned Bitcoin and all crypto activity in 2021, citing environmental damage, fraud risks, and illegal money flows. Yet China already holds the second-largest government Bitcoin stockpile in the world. In May 2025, China’s International Monetary Institute translated and shared a report by former White House economist Matthew Ferranti arguing that Bitcoin could help central banks guard against inflation, sanctions, and financial crises, passing it to Communist Party policymakers with a note saying Bitcoin’s rise as a reserve asset “deserves continued attention.”

The clearest sign of China’s real intentions is a legal fight with Washington over 127,000 Bitcoin worth roughly $15 billion, seized by the U.S. Department of Justice from Chen Zhi, a Chinese billionaire accused of running fraud operations across Southeast Asia. Chinese officials pulled Chen back to China in January before U.S. authorities could detain him. Beijing then accused Washington of stealing the Bitcoin through a hack as far back as 2020. If China recovers Chen’s holdings, it would control roughly 321,000 Bitcoin, well ahead of the United States at 198,000.

Two U.S. senators are pushing to cut China’s advantage on the mining end. In March, Senators Bill Cassidy of Louisiana and Cynthia Lummis of Wyoming introduced the “Mined in America” bill, which addresses the 97% of China’s hardware used in 38% of U.S. global Bitcoin mining activity. About 82% of global production of specialized chip miners is controlled by Bitmain. The bill bans certified miners from buying any new China-made hardware from January 1, 2027, and requires complete transition away from such hardware by 2030. Certified miners can sell freshly mined Bitcoin to the Treasury at a tax advantage.

Meanwhile, China is tightening its crypto rules. It is now illegal to promote cryptocurrency online on any platform, with the rule taking effect on September 30th.