Legislation has been introduced in the US Senate to establish a strategic Bitcoin reserve. Submitted by Senator Cynthia Lummis, well known for her support of digital assets, S.4912, the Bitcoin Act, officially entitled, Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act was sent to the Senate Banking Committee on July 31, 2024.
Via X, Senator Lummis said, “if we want to get serious about addressing our national debt and spending crisis, we need bold, innovative solutions.” The aim is to reduce the federal debt by utilizing Bitcoin.
The legislation seeks to:
- Establish a decentralized network of secure Bitcoin vaults operated by the United States Department of Treasury with statutory requirements ensuring the highest level of physical and cybersecurity for the nation’s Bitcoin holdings.
- Implement a 1-million-unit Bitcoin purchase program over a set period of time to acquire a total stake of approximately 5% of total Bitcoin supply, mirroring the size and scope of gold reserves held by the United States.
- Be paid for by diversifying existing funds within the Federal Reserve System and Treasury Department.
- Affirm self-custody rights of private Bitcoin holders and emphasize that the strategic Bitcoin reserve shall not infringe upon individual financial freedoms.
As the Senate is controlled by Democrats and the Senate Banking Committee is Chaired by Senator Sherrod Brown, someone who does not like crypto and Fintech in general, there is little chance it will move forward in the Committee and make it to a Senate vote. Brown is up for election in Ohio in a race that is expected to be tight. His challenger, Bernie Moreno, has been very supportive of the crypto sector.
If the Republicans win in the Fall, pro digital asset legislation will stand a stronger chance of becoming law, as former President Donald Trump has outlined his support of digital asset innovation in the GOP platform.
