Senator Cynthia Lummis introduced new legislation that aims to establish a Bitcoin strategic reserve for the US totaling at least 1 million BTC — 5% of the total supply.
Lummis announced the new bill at the Bitcoin2024 conference on July 27 following former President Donald J. Trump’s keynote, who also vowed to make the US a Bitcoin “superpower” and ensure the government never sells the 210,000 BTC it already holds.
The flagship crypto reacted positively to the announcement, reversing most of the day’s losses to trade at $68,750 as of press time, based on CryptoSlate data.
Bitcoin reserve bill
In her speech, Lummis detailed the plan to create a network of secure storage vaults and a purchase program aimed at transparent management of the federal government’s Bitcoin holdings.
The initiative would begin by moving the 210,000 Bitcoin the US government currently holds into a Treasury-managed reserve. This reserve will accumulate 1 million BTC over five years, representing 5% of the global supply.
Under the bill, the Bitcoin reserve will be held for at least 20 years and used only to reduce the country’s national debt. Lummis suggested that this strategic move could significantly cut the national debt by 2045.
MicroStrategy executive chairman Michael Saylor’s presentation at the event on July 26 detailed how the US could eliminate its debt by adopting a “Bitcoin maxi” strategy. He projected that the US could accumulate $30 trillion in Bitcoin by 2045 after reducing its debt to zero by applying the most aggressive investment strategy.
Saylor believes the first country to begin accumulating Bitcoin by issuing fiat currency will “win” and have the highest chance of becoming the world’s next superpower.
Excess Fed reserves
Lummis said her bill would not require further funding by tax payers since the government already has the money needed to implement the proposed Bitcoin reserve. She proposed the conversion of excess reserves from the 12 Federal Reserve Banks into Bitcoin over the next five years.
Lummis argued that holding Bitcoin, an asset that has historically grown in value, could be a more effective financial strategy than holding assets designed to debase over time.
The proposed bill signifies a significant step toward integrating digital assets into national policy, potentially positioning the US as a leader in the global financial landscape.
At the time of press 12:36 am UTC on Jul. 28, 2024, Bitcoin is ranked #1 by market cap and the price is up 0.4% over the past 24 hours. Bitcoin has a market capitalization of $1.34 trillion with a 24-hour trading volume of $34.46 billion. Learn more about Bitcoin ›
At the time of press 12:36 am UTC on Jul. 28, 2024, the total crypto market is valued at at $2.42 trillion with a 24-hour volume of $71.96 billion. Bitcoin dominance is currently at 55.47%. Learn more about the crypto market ›
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