Senator Cynthia Lummis has introduced new legislation to establish a Bitcoin strategic reserve for the United States. This reserve would total at least 1 million BTC, representing 5% of the total supply.
Announcement at Bitcoin2024 Conference
Lummis announced the new bill at the Bitcoin2024 conference on July 27. Former President Donald J. Trump, who also spoke, vowed to make the US a Bitcoin “superpower.” He promised that the government would never sell the 210,000 BTC it currently holds.
Positive Market Reaction
Bitcoin’s price reacted positively to the announcement. It reversed most of the day’s losses to trade at $68,750, according to CryptoSlate data.
Bitcoin Reserve Bill Details
In her speech, Lummis outlined a plan to create a network of secure storage vaults. She also described a purchase program aimed at transparent management of the federal government’s Bitcoin holdings. The initiative would start by moving the 210,000 Bitcoin currently held by the US government into a Treasury-managed reserve. This reserve is expected to accumulate 1 million BTC over five years, representing 5% of the global supply.
Long-term Goals and Debt Reduction
Under the proposed bill, the Bitcoin reserve would be held for at least 20 years and used solely to reduce the national debt. Lummis suggested that this strategic move could significantly lower the national debt by 2045.
Michael Saylor’s “Bitcoin Maxi” Strategy
Michael Saylor, executive chairman of MicroStrategy, presented at the event on July 26. He detailed how the US could eliminate its debt by adopting a “Bitcoin maxi” strategy. Saylor projected that the US could accumulate $30 trillion in Bitcoin by 2045. This aggressive investment strategy would reduce its debt to zero.
The First Mover Advantage
Saylor believes that the first country to begin accumulating Bitcoin by issuing fiat currency will “win.” This country would have the highest chance of becoming the world’s next superpower.
Utilization of Excess Fed Reserves
Lummis stated that her bill would not require additional taxpayer funding. The government already has the necessary funds to implement the proposed Bitcoin reserve. She proposed converting excess reserves from the 12 Federal Reserve Banks into Bitcoin over the next five years.
Financial Strategy and Asset Growth
Lummis argued that holding Bitcoin could be a more effective financial strategy than holding assets that tend to depreciate over time. Bitcoin has historically increased in value.
Integrating Digital Assets into National Policy
The proposed bill represents a significant step toward integrating digital assets into national policy. It could potentially position the US as a leader in the global financial landscape.
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