United States Senator Cynthia Lummis recently unveiled the draft of a new bill called the “Bitcoin Act of 2024,” which outlines a plan to establish a federal stockpile of 1 million Bitcoin. This proposal is a departure from Lummis’s previous comments and introduces the idea of a “Bitcoin Purchase Program” for the U.S. Treasury. The program aims to acquire up to 200,000 BTC annually for five years, with the goal of reaching a total reserve of 1 million BTC.
Key details of the proposed legislation include the establishment of a US Strategic Bitcoin Reserve, which would be financed, in part, by a revaluation of the Federal Reserve’s gold reserves. The plan involves Federal Reserve banks returning their gold certificates to the U.S. Treasury, who would issue new certificates reflecting the current market value of gold. The cash value difference between the old and new certificates would then be remitted to the Treasury Secretary.
In terms of funding, the Federal Reserve’s balance sheet currently values its gold reserves at $11 billion based on an outdated valuation. However, with gold’s current market price significantly higher, the Treasury’s 8,134 tonnes of gold could be worth around $630 billion. The proposed legislation aims to use this surplus to acquire Bitcoin, with suggestions that the Treasury could buy $64 billion worth of BTC using just a fraction of the windfall.
Additionally, the bill proposes funding Bitcoin acquisitions through a decrease in the Federal Reserve banks’ discretionary surplus from $6.825 billion to $2.4 billion over the years 2025 to 2029. This reallocation of funds would contribute to the purchase of Bitcoin. While the gold revaluation plan appears feasible, some Bitcoin proponents are skeptical about the actual existence of the government’s claimed gold reserves, calling for audits to verify the Treasury’s holdings.
Despite some skepticism from Bitcoin proponents about the government’s gold reserves, Senator Lummis’s proposed legislation has garnered attention for its innovative approach to establishing a federal stockpile of Bitcoin. By leveraging the revaluation of gold reserves and funding Bitcoin acquisitions through net earnings from the Federal Reserve, the bill aims to increase the federal Bitcoin reserve to 1 million BTC. If successfully implemented, this initiative could have significant implications for the U.S. government’s investment strategy and its position in the digital asset space.
Overall, the “Bitcoin Act of 2024” presents a bold vision for incorporating Bitcoin into the federal government’s financial reserves. With a focus on utilizing existing assets like gold reserves and Federal Reserve earnings, Senator Lummis’s proposed legislation seeks to establish a strategic Bitcoin reserve for the U.S. Treasury. As discussions around the bill continue, it will be interesting to see how this innovative approach to financial planning unfolds and whether it will pave the way for increased adoption of digital assets within government institutions.
