Sen. Cynthia Lummis’ Bitcoin Strategy Reserve Bill: Digital Chamber Courts Senators For Support

• A new bill proposes that the U.S. purchase 1 million BTC, or 5% of the total supply, over five years.
• The U.S. Government holds approximately 200,000 BTC worth over $13 billion.
• U.S. national debt recently surpassed$35 trillion.

U.S. Senator Cynthia Lummis introduced her Strategic Bitcoin Reserve bill, which will see the government leverage the premier crypto as part of its fiscal policy to stabilize the dollar and counter inflation.

With aims to acquire 5% of the total Bitcoin supply and set up decentralized Bitcoin vaults around the country, Lummis’ Bitcoin bill is ambitious at best. Regardless, it marks a significant shift in sentiment toward crypto.

The BITCOIN Act

In a July 31 post, the Wyoming Republican senator officially introduced  the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2024” that would direct the U.S. government to establish a reserve fund for BTC.

The BITCOIN Act would first involve the government going on a rigorous Bitcoin buying spree. The “Strategic Bitcoin Reserve” program would set out to purchase 1 million BTC over a five-year period, capping the spending at 200,000 BTC per year. According to Lummis, this would mirror the “size and scope” of U.S. gold reserves.

“Establishing a strategic Bitcoin reserve to bolster the U.S. dollar with a digital hard asset will secure our nation’s standing as the global financial leader for decades to come,”

Furthermore, it would also involve establishing a “decentralized network of secure Bitcoin storage facilities” around the country. These would be evaluated and selected based on “comprehensive” risk assessments that favor locations with the best “geographic diversity, security, and accessibility.”

According to the draft bill, the government would need to hold the BTC for at least 20 years and only be cashed out to pay off federal debt. Following this, the U.S. Treasury would be unable to offload more than 10% of assets over two years.

U.S. BTC Holdings

Lummis initially revealed the grand plan at the Bitcoin 2024 conference in Nashville on July 27, 2024. Interestingly, a similar concept, or sentiment, was echoed by Donald Trump at that very same conference, stating :

“I am announcing that if I am elected, it will be the policy of my administration, United States of America, to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future, we’ll keep 100%.”

In his keynote speech, Trump referred to the U.S. government’s substantial holdings of around 200,000 BTC tokens  worth some $13.5 billion. These tokens were mostly gained from seizure and forfeiture as the result of criminal investigations.

This treasure trove would provide a solid springboard for Limmus’ bill. Going by the numbers, it would be a 1-year head start, as 1 million BTC equates to approximately $65 billion at today’s prices. That said, the U.S. government recently disposed of around $2 billion worth of BTC, transferring them in a batch of transactions to an unknown recipient.

Time Will Tell

As expected, the bill has caught the attention of crypto observers, lawmakers, regulators, and onlookers of all shapes and sizes.

With an outpouring of support  for the BITCOIN Act on her X feed. especially from industry leaders, the bill could find itself receiving bipartisan support. As cryptocurrencies an increasingly important part of people’s finances, the topic of Bitcoin and digital assets has to become a key voting issue ahead of the U.S. Presidential elections.

In the wake of spot Bitcoin and Ethereum exchange-traded funds (ETFs), attitudes towards crypto have shifted drastically. This is especially true following Donald Trump’s u-turn on crypto, which he now seems to be throwing his full weight behind as he rallies the Web3 industry behind him.

That said, this is election season, and bipartisan bills passing through Congress seem rather unlikely, given how divisive this election season is proving to be. Regardless of whether or not the bill passes, the implications remain huge, as Bitcoin is now considered worthy of being a reserve asset for an economic powerhouse like the United States.

Digital Chamber Hand-Delivers Letters

In a recent development, the Digital Chamber, a prominent blockchain advocacy association, called on U.S. lawmakers  to vote in favor of the Bitcoin reserve bill.

Most notably, the lobby group is hand-delivering a letter to “every U.S. Senator.” The letter explains that Lummis’ BITCOIN Act aligns with the national interest.

The Digital Chamber highlighted several benefits of backing Lummis’ bill, urging that adding BTC to the nation’s balance sheet would not only relieve its economy but also position the U.S. as a world leader in the future economy.

The blockchain lobby group specifically pointed out that adding Bitcoin to the strategic reserve could enhance the nation’s ability to hedge against inflation and economic volatility.

The Digital Chamber’s push for the BITCOIN Act comes amid a backdrop of stagnant interest rates, which have remained unchanged and at historic highs for over a year, and a swelling national debt that has surpassed the $35 trillion mark.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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