A draft bill proposing the establishment of a U.S. Strategic Bitcoin Reserve reveals that the initiative would be partly financed by revaluing the gold certificates held by the Federal Reserve System. The draft, shared by the office of Senator Cynthia Lummis, outlines a comprehensive plan to create a decentralized network of secure Bitcoin storage facilities across the country.
Senator Lummis, a Republican from Wyoming renowned for her pro-Bitcoin policies, unveiled her proposal for the strategic reserve at the Bitcoin Nashville conference on Saturday. Her announcement came shortly after former U.S. President Donald Trump addressed the crowd on blockchain policy, in a room filled to its 8,500-person capacity.
The proposed legislation, tentatively titled the “Bitcoin Act of 2024,” directs the Treasury Secretary to establish a network of Bitcoin vaults distributed nationwide, emphasizing geographic diversity, security, and accessibility. According to the draft, the Treasury would initiate a “Bitcoin Purchase Program,” aiming to acquire up to 200,000 BTC annually over five years, totaling 1 million BTC. These assets would be held for at least 20 years, with sales restricted to debt repayment purposes, and no more than 10% of the holdings could be sold within any two-year period post the holding period.
To fund the Bitcoin purchases, the draft bill outlines several methods, including reallocating $6 billion from the Federal Reserve’s net earnings remitted to the Treasury between fiscal years 2025 and 2029. Additionally, it proposes reducing the discretionary surplus funds of Federal Reserve banks from $6.825 billion to $2.4 billion.
A significant component of the financing plan involves revaluing the Federal Reserve banks’ gold certificates. The draft stipulates that within six months of the legislation’s enactment, all outstanding gold certificates would be tendered to the Treasury Secretary. Subsequently, new gold certificates reflecting the fair market value of the gold would be issued within 90 days. The Federal Reserve banks would then remit the cash difference between the old and new certificates to the Treasury.
