Since they propose a bill for that, let’s just assume they already set all the measures to keep those billions in Bitcoin safe. They can’t just trust a 3rd party anymore. Even if it’s in an institutional wallet, we all know nothing is hack proof.

With the government holding it, if it gets lost then they got no one to blame but themselves. And honestly i think that’s good for Coinbase too, so they can operate without pressure. because if that money got lost, the government will surely go after them, and they’ll never win a lawsuit against the government anyway.