Key Takeaways
- Sen. Lummis proposes Bitcoin Strategic Reserve bill.
- The bill aims for the U.S. to hold 5% of Bitcoin's total supply.
- Lummis' bill reaffirms the right to self-custody of Bitcoin in the U.S.
On July 31, 2023, Senator Cynthia Lummis officially introduced the Bitcoin Strategic Reserve bill, directing the U.S. government to establish a reserve fund for Bitcoin.
The bill proposes creating a “decentralized network of secure Bitcoin vaults” managed by the U.S. Treasury, emphasizing strict cybersecurity and physical security measures to protect the assets.
The bill aims to accumulate 1 million Bitcoin, approximately 5% of the total supply, using existing U.S. Treasury funds. This strategy mirrors the Treasury’s gold allocation.
Senator Lummis stated:
As families across Wyoming struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights, it is time for us to take bold steps to create a brighter future for generations to come by creating a strategic Bitcoin reserve.
Reactions
Additionally, the bill reaffirms the right to self-custody of Bitcoin in the United States, a right under scrutiny by some lawmakers.
The proposal has gained attention from figures like RFK Jr. and Republican presidential candidate Donald Trump, who have both expressed interest in Bitcoin’s role in the economy.
However, skepticism remains.
After Trump’s promise to retain the United States’ Bitcoin holdings, the government moved 29,800 Bitcoin (worth around $2 billion) to an unmarked wallet.
Galaxy Digital CEO Mike Novogratz described the move as “tone deaf.”
Despite concerns, proponents argue that Bitcoin offers a hedge against inflation and the declining value of fiat currencies. Matt Bell, CEO of Turbofish, believes that the sustainability of fiat currencies is increasingly questioned globally, bolstering the case for hard assets like Bitcoin.
