The ambitious plan for the U.S. government to acquire and hold one million bitcoins is gaining momentum, as key political shifts create a more favorable environment for the proposed BITCOIN Act.
Senator Cynthia Lummis introduced the "Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024" to the 118th Congress. This groundbreaking legislation would establish a strategic bitcoin reserve under Treasury control, with a mandate to purchase 200,000 bitcoins annually over five years.
The U.S. government currently holds approximately 207,000 bitcoins. Under the proposed legislation, these holdings would be consolidated under Treasury management, with an additional 793,000 bitcoins to be acquired. At current market prices around $76,375 per bitcoin, this additional acquisition would cost over $60.5 billion.
To fund these purchases, the Act proposes reducing Federal Reserve banks' surplus funds by about $4.4 billion and directing $6 billion of their annual earnings toward bitcoin acquisitions. The acquired bitcoins would need to be held for at least 20 years before any potential sale.
Recent political developments have improved the bill's prospects. Senator Sherrod Brown, who previously blocked the bill in the Senate Banking Committee, lost his seat to Bernie Moreno, a blockchain company board chairman. Senator Tim Scott, who has shown support for the legislation, is positioned to become the new committee chair.
The bill's bipartisan appeal is evident, with Democratic Representative Ro Khanna expressing support, comparing Bitcoin's technological importance to that of the iPhone. Industry leaders suggest swift action is necessary, as other nations may attempt to accumulate bitcoin reserves before the U.S.
Senator Lummis has called for passing the BITCOIN Act within the first 100 days of the new congressional session, highlighting the growing urgency around this initiative. As global interest in bitcoin as a strategic asset increases, the race to accumulate reserves could intensify among nations.
This legislation represents a potential watershed moment in U.S. monetary policy, as it would establish the largest known institutional bitcoin holding worldwide. The outcome of this bold initiative could reshape the landscape of national financial reserves and digital asset adoption.