- First, the 210,000 Bitcoin that the US government now owns would be transferred into a reserve that is overseen by the Treasury.
A new bill introduced by Senator Cynthia Lummis seeks to create a strategic reserve of at least one million Bitcoins (BTC) for the United States, which represents 5% of the overall supply.
Following former President Donald J. Trump’s keynote address at the Bitcoin2024 conference on July 27, Lummis introduced the new measure. Trump also pledged to turn the US into a Bitcoin superpower and guarantee that the government never sells the 210,000 Bitcoin it already owns.
According to data from CryptoSlate, the leading cryptocurrency responded favorably to the news, erasing the majority of the day’s losses to trade at $68,750 as of press time.
Reserve bill for bitcoin
During her address, Lummis went over the strategy to establish a network of safe deposit boxes and a buyback program with the goal of managing the federal government’s Bitcoin holdings in a transparent manner.
First, the 210,000 Bitcoin that the US government now owns would be transferred into a reserve that is overseen by the Treasury. Over the course of five years, this reserve will amass one million Bitcoin, or 5% of the total supply.
The bill stipulates that the Bitcoin reserve will be kept for a minimum of 20 years and will only be utilized to lower the national debt of the nation. By 2045, Lummis said, this calculated action might drastically reduce the national debt.
In his presentation on July 26, Michael Saylor, executive chairman of MicroStrategy, outlined how the US might become debt-free by implementing a Bitcoin adoption strategy. He said that by using the most aggressive investment plan and paying off all of its debt, the US might have $30 trillion in Bitcoin by 2045.
Saylor thinks the nation with the greatest chance of becoming the next global superpower will be the one to “win” and start amassing Bitcoin by creating fiat money first.
Surplus reserves held by the Fed
According to Lummis, her measure wouldn’t need more tax payer funding because the government already has the funds necessary to put the proposed Bitcoin reserve into effect. Over the course of the following five years, she suggested turning excess reserves from the twelve Federal Reserve Banks into Bitcoin.
Holding Bitcoin, which has traditionally increased in value, according to Lummis, may be a better financial move than holding assets that may eventually lose value.
The proposed plan might establish the US as a leader in the world financial scene and is a major step toward incorporating digital assets into national policy.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
