Key Takeaways
- U.S. Senator Cynthia Lummis proposes a Bitcoin reserve funded by revaluing the Federal Reserve's gold.
- The plan includes purchasing up to 1 million BTC over five years, held for a minimum of 20 years.
- Revaluation could increase the Federal Reserve's gold valuation from $42.22 to $2,400 per troy ounce.
U.S. Senator Cynthia Lummis has put forth a proposal to establish a strategic Bitcoin reserve, funded partly by revaluing the Federal Reserve’s gold holdings. The draft legislation, shared with CoinDesk, outlines a “Bitcoin Purchase Program” aiming to acquire up to 200,000 BTC annually over five years.
Announced at the Bitcoin Nashville conference on July 27, Lummis’s plan emphasizes Bitcoin-friendly policies.
The event also featured former President Donald Trump, who suggested using existing government-held Bitcoin, obtained through criminal forfeitures, to create a “strategic national Bitcoin stockpile.”
The draft bill, titled the “Bitcoin Act of 2024,” mandates the Treasury Secretary to create a decentralized network of secure Bitcoin storage facilities across the U.S., prioritizing geographic diversity and security.
This initiative aims to hold a total of 1 million BTC for at least 20 years, with restrictions on selling the assets to prevent large-scale disposal.
Funding the Bitcoin reserve involves multiple strategies, including reallocating $6 billion from Federal Reserve earnings to the Treasury between 2025 and 2029.
It also plans to reduce the Federal Reserve banks’ discretionary surplus funds from $6.825 billion to $2.4 billion.
A key aspect of the proposal involves revaluing the Federal Reserve banks’ gold certificates to their current market value.
The Federal Reserve’s gold, valued at $11 billion on July 24, is currently priced at $42.22 per troy ounce but could be revalued to reflect the market price of around $2,400 per ounce, generating additional funds for the Bitcoin reserve.
