Senator Lummis Proposes Strategic Bitcoin Reserve to Reduce US National Debt

By: Eva Baxter

Senator Cynthia Lummis has introduced groundbreaking legislation aimed at establishing a Bitcoin strategic reserve for the United States, comprising at least 1 million BTC. This ambitious strategy represents 5% of the total supply of Bitcoin currently available worldwide.

The announcement was made at the Bitcoin2024 conference on July 27, following a keynote address by former President Donald J. Trump. Trump also expressed his commitment to making the US a Bitcoin superpower and ensuring that the government retains its 210,000 BTC holdings. In an immediate market response, Bitcoin prices rose, trading at $68,750.

Details of the Bitcoin Reserve Bill

In her speech, Lummis outlined the comprehensive plan to initiate a secure network of storage vaults and an organized purchase program. Initially, the 210,000 BTC currently held by the government would be transferred to a Treasury-managed reserve. Over five years, this reserve aims to accumulate 1 million BTC, amounting to 5% of the global Bitcoin supply. According to the bill, these reserves are to be held for a minimum of 20 years and used solely to alleviate national debt.

MicroStrategy's executive chairman Michael Saylor also spoke at the event, discussing how the US could potentially eliminate its national debt by adopting a 'Bitcoin maxi' strategy. Saylor projected that through aggressive Bitcoin investment, the US could wipe out its national debt and amass $30 trillion worth of Bitcoin by 2045.

Utilizing Excess Federal Reserve Assets

One critical aspect of Lummis' bill is that it does not call for additional taxpayer funding. Instead, Lummis proposed converting excess reserves from the 12 Federal Reserve Banks into Bitcoin over the next five years. She noted that Bitcoin, an asset historically rising in value, could serve as a more effective financial tool compared to assets that have a tendency to depreciate over time.

This legislative proposal represents a significant step toward incorporating digital assets into national economic strategy. If implemented, it could position the US as a formidable force in the global financial arena.