Rep. Nick Begich (R-AK) announced Tuesday that he is introducing legislation that establishes a strategic bitcoin reserve, an idea that has gained traction since President Donald Trump’s victory.
Begich announced the legislation during a Washington, D.C., conference hosted by the Bitcoin Policy Institute. The freshman congressman was joined by Sen. Cynthia Lummis (R-WY), who is sponsoring the bill, the BITCOIN Act, on the Senate side. She had previously introduced another iteration of the strategic reserve legislation last year.
In an exclusive interview with the Washington Examiner ahead of the Tuesday announcement of the bitcoin reserve legislation, Begich said that the time is right to pass the legislation, with President Donald Trump is in office and Republicans controlling both chambers.
“I think what we’ve seen over the last couple of months is a relatively unified Republican Party that recognizes that we have a generational window of opportunity to make the fundamental changes necessary for the federal government to work well for the American people again,” he said in his congressional office.
A strategic bitcoin reserve would be a U.S. reserve containing a large amount of the cryptocurrency.
Notably, Trump has endorsed the idea of such a reserve and even signed an order this past week that would form a bitcoin reserve. But the reserve created by the Lummis-Begich legislation goes beyond the Trump order.
Trump’s order calls for all of the bitcoin seized through criminal and civil forfeitures to be consolidated into one reserve for the U.S. government to hold as a strategic asset. The BITCOIN Act would initiate a bitcoin purchase program with the goal of the U.S. acquiring a total stake of approximately 5% of total bitcoin supply — 1 million bitcoins, worth about $80 billion in today’s prices.
The bill directs the Treasury Department to purchase 200,000 bitcoins per year for five years in order to reach that goal.
The Treasury would be responsible for overseeing, auditing, and managing the bitcoin reserve funds. The legislation would establish a minimum holding period of 20 years for all government-held bitcoin, meaning that the Treasury wouldn’t be able sell off those assets for two decades.
Begich said that it is important that the reserve be strategic and a long-term play. Preventing the Treasury from selling those assets for 20 years would accomplish that goal.
“Any strategic reserve asset needs to be held long enough to be strategic,” he said. “And so the United States government is not a day trader. We’re interested in long-term, stable assets that provide a strategic advantage to the national balance sheet.”
While Trump signed the order to establish such a reserve, the BITCOIN Act goes well beyond the bounds of an executive order by enshrining it in law.
“What this bill does is it establishes the strategic Bitcoin reserve in law, long-term,” Begich said. “So what a president can do in four years, a Congress can do permanently.”
The cost of the bitcoin purchase program in the Lummis-Begich legislation intends to be offset by reducing the discretionary surplus fund of the Federal Reserve. It allocates $6 billion per year from Fed remittances to fund purchases, and requires the Fed to update gold certificate values and remit additional funds to the Treasury to help finance bitcoin purchases.
The idea of a bitcoin reserve has some prominent supporters in the cryptocurrency space, but has also attracted some critics.
Proponents say such a reserve could function as a hedge against inflation and prevent further devaluation of the dollar while maintaining global dominance in financial innovation. Critics, though, pan the idea as a solution in search of a problem and risky, given the volatility and uncertainty surrounding the relatively new asset class.
While Republicans hold the White House, Senate, and House, Begich said he anticipates his legislation to garner some bipartisan support in Congress.
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“We are in conversations with several Democrats in the House and I know that there are conversations likewise in the Senate, with Democrats,” he said.
Begich said that he is hopeful that the BITCOIN Act will pass Congress as a standalone bill this Congress, in part because he said the legislation has “strong potential” to receive support from both sides of the aisle.
