Pentagon Treats Bitcoin as Strategic Tool Against China

On April 30 at a House Armed Services Committee hearing, Defense Secretary Pete Hegseth told lawmakers that Bitcoin is included in classified Defense Department programs intended to project power and counter China. He said U.S. Indo-Pacific Command operates a live Bitcoin node to test elements of the protocol in operational settings.

Hegseth described Pentagon work as covering both efforts to enable uses of the technology and efforts to defeat or mitigate it. “I am a long enthusiast of Bitcoin and crypto potential,” he told lawmakers, and he added, “A lot of the things we are doing, enabling it or defeating it, are classified efforts that are ongoing inside our department, which do provide us a lot of leverage in a lot of different scenarios.”

Earlier in April, INDOPACOM commander Samuel J. Paparo Jr. confirmed the command runs a live Bitcoin node and is testing protocol behavior in operational settings. Paparo described Bitcoin as a system built on cryptography, blockchain and proof-of-work and said the protocol can impose real-world costs in cybersecurity contexts.

The Defense Department did not provide public details about the classified programs Hegseth referenced. Pentagon officials declined to quantify the programs’ scope, timelines or budgets during the hearing.

The remarks come amid 2026 policy discussions that have included a potential strategic Bitcoin reserve and wider federal attention to digital assets for national security purposes. Public financial disclosures indicate Hegseth held cryptocurrency before taking office and divested after his appointment.

Analysts and current and former officials say the Pentagon’s testing appears focused on resilience, security properties and potential defensive applications of blockchain-based systems. Department statements emphasize classified experimentation and operational testing rather than public deployments.

Clips of the hearing circulated on social platforms and drew attention from market participants and policy observers. Lawmakers at the hearing pressed Pentagon officials on how the department plans to secure any strategic advantage tied to Bitcoin.

Officials did not offer a timeline for further disclosures or public deployments. Technical, budgetary and operational details about the programs remain classified.