Lummis introduces legislation to establish 1 million Bitcoin strategic reserve for the US

Senator Cynthia Lummis has introduced new legislation that aims to establish a strategic Bitcoin reserve for the US totaling at least 1 million BTC – 5% of the total supply.

Lummis announced the new bill at the Bitcoin2024 conference on July 27, following former President Donald J. Trump’s keynote, who also promised to make the US a Bitcoin superpower and ensure that the government never loses the 210,000 BTC that already owns it, will sell it.

The flagship crypto responded positively to the announcement, reversing most of the day’s losses and trading at $68,750 at the time of writing, based on CryptoSlate facts.

Bitcoin reserve account

In her speech, Lummis described the plan to create a network of secure storage vaults and a purchasing program aimed at transparently managing the federal government’s Bitcoin assets.

The initiative would start by moving the 210,000 Bitcoin currently held by the US government into a reserve managed by the Treasury Department. This reserve will accumulate 1 million BTC over five years, representing 5% of the global supply.

According to the bill, the Bitcoin reserve will be held for at least twenty years and will only be used to reduce the country’s national debt. Lummis suggested that this strategic move could significantly reduce the national debt by 2045.

MicroStrategy Executive Chairman Michael Saylor’s presentation at the July 26 event detailed how the US can eliminate its debt by adopting a “Bitcoin maxi” strategy. He predicted that the US could accumulate $30 trillion in Bitcoin by 2045 after reducing its debt to zero by adopting the most aggressive investment strategy.

Saylor believes that the first country to start accumulating Bitcoin by issuing fiat money will “win” and have the best chance of becoming the world’s next superpower.

Excess Fed Reserves

Lummis said her bill would not require further funding from taxpayers because the government already has the money needed to implement the proposed Bitcoin reserve. She proposed converting the excess reserves of the twelve Federal Reserve banks into Bitcoin over the next five years.

Lummis argued that holding Bitcoin, an asset that has historically grown in value, could be a more effective financial strategy than holding assets that are designed to decline over time.

The proposed bill marks an important step toward integrating digital assets into national policy, potentially positioning the U.S. as a leader in the global financial landscape.

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