Senator Cynthia Lummis has introduced the Bitcoin Act of 2024, a proposal to create a U.S. Bitcoin reserve fund. The plan involves selling some of the U.S. government's gold to buy 1 million Bitcoins, representing about 5% of all available Bitcoins.
At current prices, this would cost about $90 billion. The government would use existing financial assets to fund this, meaning no new debt would be added. Bitcoin would be managed by the US Treasury and held for at least 20 years.
Senator Lummis believes Bitcoin is a better asset than gold for the United States because it is decentralized and has a limited supply.
“We already have financial assets in the form of gold certificates to convert into Bitcoin,” she said.
Bitcoin will be securely stored nationwide in a decentralized manner, with special rules for any changes in the Bitcoin system, such as forks or airdrops, and will be held for five years before any decisions are made about what to do with it.
The Bitcoin Act of 2024 also allows U.S. states to hold Bitcoin separately. To pay for Bitcoin, the proposal would use the first $6 billion of the Federal Reserve's annual transfer to the Treasury from 2025 to 2029. This is intended to help protect the United States from inflation while strengthening its financial position.
The proposal has received more attention because of President Donald Trump's support for cryptocurrencies. Trump has expressed interest in creating a Bitcoin reserve fund, and his ideas could help push the bill forward.
If the plan is approved, Bitcoin could become more widely accepted as a financial asset and could inspire other countries to follow suit.
