The plan proposes the creation of a “Bitcoin Purchase Program” aimed at acquiring up to 200K BTC per year over a five-year period.
Lummis, a Republican from Wyoming known for her pro-BTC stance, announced her intention to propose this reserve on Saturday at the Bitcoin Nashville conference. She took the stage just a few hours after former U.S. President Donald Trump spoke. In his speech, Trump endorsed using the existing BTC holdings of the U.S. government, primarily obtained through seizures and arrests, to form the core of the new strategic national Bitcoin reserve.
According to the bill, tentatively titled the “Bitcoin Act of 2024,” the Secretary of the Treasury will establish a decentralized network of secure BTC storage facilities distributed across the United States. Locations for these storage facilities will be selected based on a comprehensive risk assessment, prioritizing geographic diversity, security, and accessibility.
The BTC will be stored for a minimum of 20 years and can only be sold for the purpose of repaying federal debt. After this period, no more than 10% of the assets can be sold within any two-year period. The purchase of the largest cryptocurrency will be financed through several methods described in the bill as compensations for the cost of the strategic BTC reserve.
The plan includes allocating $6B from the net earnings remitted by the Federal Reserve to the Treasury over the fiscal years 2025 to 2029. It also involves reducing the discretionary surplus funds of the Federal Reserve banks from $6.825B to $2.4B.
Additionally, there will be a revaluation of the Federal Reserve banks’ gold certificates to reflect their market value.
Under the plan, within six months of the bill’s enactment, the Federal Reserve banks must transfer all their outstanding gold certificates to the Secretary of the Treasury. Within 90 days thereafter, the Secretary of the Treasury will issue new gold certificates to the Federal Reserve banks, reflecting the fair market value of the gold.
The Federal Reserve banks will then remit the monetary difference between the old and new certificates to the Secretary of the Treasury.
According to the latest update from the central bank’s balance sheet as of July 24, the Federal Reserve banks held a “gold stock” valued at $11B. This valuation might be based on the official book value of U.S. gold at $42.22 per troy ounce. However, the market value of gold is more than 50 times higher, with futures contracts for the yellow metal trading around $2,4K per ounce.