Highlights:
- Senator Lummis introduced the BITCOIN Act to create a US Bitcoin reserve and boost economic stability.
- The bill includes strict security measures and aims to acquire up to 1 million Bitcoins.
- Key politicians and market experts support the proposal, which could signal a major shift in US financial policy.
United States Senator Cynthia Lummis officially introduced the Bitcoin Strategic Reserve bill in the Senate on July 31, 2024. First mentioned at Bitcoin Nashville 2024, the bill suggests that the US government should have a reserve account for Bitcoin to address the national debt and boost economic stability.
Advertisement
The bill also directs lawmakers and officials to implement strict cybersecurity protocols and physical security measures to protect Bitcoin funds from theft. Lummis titled it the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act.”
Lummis said:
“Bitcoin is transforming not only our country but the world. Becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation. This is our Louisiana Purchase moment that will help us reach the next financial frontier.”
BITCOIN Act Enhances US Balance Sheet with Strategic Reserve and Purchase Program
The BITCOIN Act aims to bolster America’s balance sheet by establishing a strategic Bitcoin reserve, serving as an additional store of value and ensuring transparent management of the federal government’s Bitcoin holdings. The legislation proposes the creation of a decentralized network of secure Bitcoin vaults operated by the US Department of Treasury. These vaults will meet statutory requirements to ensure the highest levels of physical and cybersecurity for the nation’s BTC holdings.
A significant aspect of the Act is the implementation of a BTC purchase program. This program aims to acquire up to 1 million Bitcoins over a set period, representing approximately 5% of the total Bitcoin supply. This program mirrors the size and scope of the US gold reserves.
The BITCOIN Act confirms that private Bitcoin holders retain their self-custody rights. Moreover, it ensures that the strategic Bitcoin reserve will not impact individual financial freedoms or private property rights.
The Act guarantees that the Federal Government cannot seize or interfere with lawfully acquired Bitcoin holdings, upholding financial sovereignty, privacy, and personal liberty. It also mandates a quarterly Proof of Reserve system for transparency, featuring public cryptographic attestations and independent third-party audits. Moreover, the Treasury Secretary will publish annual reports on the Bitcoin Purchase Program, showing total holdings, transactions, and control of private keys for the Strategic Bitcoin Reserve.
Bitcoin Reserve Proposal Gains Support from Key Politicians and Market Experts
Pro-Bitcoin politicians Donald Trump and RFK Jr. support the Bitcoin Reserve initiative. The Republican presidential candidate believes adopting a strategic reserve will lead to economic stability for the United States. Market experts also suggest that this move could signify a major shift in US financial strategy. Steven McClurg, CoinShares’ Head of Digital Assets, believes adding Bitcoin to reserves could help with inflation and the lack of a monetary standard in the US.
Soon after Trump pledged not to sell any US Bitcoin holdings, the government transferred 29,800 Bitcoin, worth about $2 billion, to an unmarked wallet. Galaxy Digital CEO Mike Novogratz criticized the move as “tone deaf.”
Bitcoin skeptic Peter Schiff has predicted that the Biden administration might soon sell its Bitcoin holdings to undermine Trump’s similar presidential plan.
If #Trump really intended to use seized #Bitcoin to start a U.S. "strategic" reserve, he'd have kept his intention a secret until he was actually in office. Now that the #Biden administration is wise to his plan, they'll make sure to sell every Satoshi before Trump takes office.
— Peter Schiff (@PeterSchiff) July 29, 2024
Advertisement
