(Original Caption) Fort Knox, Kentucky: Exterior view of the United States Bullion Depository at Ft. … [+]
On July 27, Senator Cynthia Lummis (R-WY) strode on to the stage at the Bitcoin Nashville conference, holding aloft a sheaf of papers. “Here it is,” she announced. “This is the Bitcoin Reserve Bill… This is our Louisiana Purchase moment.”
Four days later, Sen Lummis introduced to the 118th Congress the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024”, or BITCOIN Act. The bill mandates that all bitcoin held by any Federal agency be transferred to the Treasury to be held in a strategic bitcoin reserve. In addition, it mandates that the Secretary of the Treasury purchase “not more than 200,000 Bitcoins per year over a 5-year period, for a total acquisition of 1,000,000 Bitcoins.” That 1,000,000 Bitcoins is then to be held by the Treasury for at least 20 years before they can consider selling it, and places a number of restrictions on potential future sales.
The US currently holds roughly 207,000 bitcoin, which the BITCOIN Act mandates be transferred to the Treasury and held as part of the strategic reserve. The remaining 793,000 bitcoin could be purchased at today’s spot price of $76,375 for $60,545,550,000. Of course, a purchase that large would likely move the price up before the entire purchase could be made, and unlike the dollars used to purchase it, bitcoin cannot be printed for free by the US government; they’re forced to buy it. The BITCOIN Act mandates that the government decrease the permissible amount of the surplus funds of the Federal reserve banks by about $4.4 billion, from $6,825,000,000 to $2,400,000,000. The bill also mandates that the first $6 billion of earnings of the Federal Reserve banks each year be used to purchase bitcoin for the strategic reserve.
After its introduction the BITCOIN Act was referred to the Senate Banking Committee, chaired by Senator Sherrod Brown (D-OH). Sen Brown did not allow the committee to vote on the bill. For this and related reasons, crypto PACs targeted Sen Brown, spending around $40,000,000 on attack ads. Sen Brown lost his seat to Bernie Moreno, Chairman of the Board of a blockchain company.
The new Chair of the Senate Banking Committee is likely to be Senator Tim Scott (R-SC), the current Ranking Member. Sen Scott appeared on stage with Sen Lummis at Bitcoin Nashville, and he is likely to bring the BITCOIN Act to a vote in committee early in the 119th Congress.
Once it passes the Senate, it will need support in what is seeming likely to be a Republican-controlled House of Representatives. There it will also find allies across the aisle. Ro Khanna (D-CA17), who also took the stage at Bitcoin Nashville, has supported the bill in the past. “How can you be against Bitcoin?” he said in Nashville. “It’s like saying ‘I’m against the iPhone’. It’s just a technology.” Democratic Rep Wiley Nickel (D-NC13) also appeared on the stage at the Bitcoin Conference, but will not be a member of the 119th Congress as he did not run for reelection.
David Bailey, CEO of Bitcoin Magazine and the man who introduced past and future President Trump at Bitcoin Nashville, thinks that the Trump administration is likely to move quickly on the BITCOIN Act. One big reason is that the world expects the BITCOIN Act to pass eventually, and so every day that the US doesn’t accumulate Bitcoin is a day where other people, companies, and even countries can get ahead of the US. On a recent Twitter spaces, Bailey said, “Now that this idea is in the public sphere…there are other nations that are going to try to frontrun the United States. I’ve already heard that term be used by a representative from one country. At Bitcoin MENA, we intend to have a nation state announcement coming from that region about someone who’s putting Bitcoin on their balance sheet.”
Senator Lummis has not addressed this line of reasoning behind passing the BITCOIN Act quickly, but made her view on the matter quite clear in a recent tweet: “An idea whose time has come. Let’s make it so in the first 100 days. Pass the BITCOIN Act.”
