The United States Pushes for a Bitcoin Strategic Reserve Act: Establishing a National Bitcoin Reserve to Enhance Financial Security and LeadershipAs global nations increasingly recognize the importance of digital assets, the United States is actively exploring ways to maintain its leadership position in this field. In this context, Senator Cynthia Lummis introduced the "BITCOIN Act of 2024" on July 31st
The United States Pushes for a Bitcoin Strategic Reserve Act: Establishing a National Bitcoin Reserve to Enhance Financial Security and Leadership
As global nations increasingly recognize the importance of digital assets, the United States is actively exploring ways to maintain its leadership position in this field. In this context, Senator Cynthia Lummis introduced the "BITCOIN Act of 2024" on July 31st. This legislation aims to establish a national Bitcoin reserve, enhancing the country's financial security and leadership in the digital asset space.
I. Act Content
By incorporating Bitcoin into the national asset reserve, the act seeks to provide the United States with a tool to counter economic uncertainties and currency instability, bolstering the nation's financial resilience. Here are the key provisions of the act:
1. Bitcoin Purchase Plan
The act establishes a "Bitcoin Purchase Plan," aiming to acquire a maximum of 200,000 bitcoins annually for five years, totaling 1,000,000 bitcoins. This would represent approximately 5% of the total Bitcoin supply. The purchasing process will be transparent and strategically implemented to minimize market disruptions. This plan aims to ensure the U.S. government holds a significant amount of Bitcoin over the next two decades, providing the nation with a long-term financial hedge instrument.
2. Establishment of Secure Storage Facilities
To guarantee secure storage of Bitcoin, the act mandates the creation of a decentralized network of Bitcoin secure storage facilities. This network will be overseen by the U.S. Treasury and distributed across the nation to enhance the security and resilience of the reserve. Each storage facility will employ cutting-edge physical and digital security measures to protect the Bitcoin reserve from unauthorized access and attacks.
3. Funding Source for Purchases
The act proposes utilizing existing funds from the Federal Reserve System and the Treasury to purchase Bitcoin. Specific methods include reassessing the Federal Reserve's gold certificates to reflect the market value of gold, allocating the difference to Bitcoin purchases. Additionally, the act plans to reduce the Federal Reserve banks' excess reserves, diverting the saved funds towards the Bitcoin purchase plan.
4. Holding Period and Usage Rules
According to the act, government-acquired Bitcoin will be held for at least 20 years. During this period, these bitcoins cannot be sold, exchanged, or auctioned except for debt repayment. After the initial holding period, a maximum of 10% of the reserve can be sold every two years. This rule aims to ensure the long-term stability of the Bitcoin reserve while providing flexibility to address future economic needs.
5. Counteracting Economic Uncertainty and Currency Instability
By incorporating Bitcoin into the national asset reserve, the act aims to equip the United States with an effective tool to combat economic uncertainty and currency instability. As a decentralized, limited-supply digital asset, Bitcoin possesses unique inflation-resistant and safe haven properties. Holding Bitcoin can not only enhance the nation's financial resilience but also maintain its leadership in global financial innovation, ensuring the United States' advantageous position in future economic competition.
II. Current Progress of United States Cryptocurrency-Related Proposals
Each Congressional session typically receives thousands of bill proposals. The 118th Congress (2023-2024): As of now, over 9,235 bills and 1,398 resolutions have been submitted, with only a portion ultimately passing and becoming law. Any member of Congress can introduce a bill.
After submission, bills are assigned to relevant committees for consideration and discussion. Committees can hold hearings, amend bills, and decide whether to submit them to the full Congress for review. For a bill to become law, it must undergo several steps, including debate and voting in the originating chamber (House or Senate), followed by the same process in the other chamber. Once passed by both chambers, the bill is presented to the President for signature, becoming law. If the President vetoes the bill, Congress can overturn the veto with a two-thirds majority vote.
In recent years, the U.S. Congress has proposed several bills related to virtual currencies:
Digital Asset Market Structure and Investor Protection Act: Introduced by Representative Don Beyer on July 28, 2021, this act aims to create a comprehensive regulatory framework for digital assets, encompassing stablecoins, decentralized finance (DeFi), and cryptocurrency exchanges.
- Stablecoin TRUST Act: Proposed by Senator Pat Toomey on December 21, 2022. This act seeks to establish a federal and state regulatory framework for stablecoin issuance, ensuring capital and reserve requirements for stablecoins and supporting the dollar's position as a digital medium of exchange.
- Cryptocurrency Accountability Act: Introduced by Representative Elissa Slotkin on July 27, 2023. This act proposes requiring members of Congress to disclose their cryptocurrency holdings, enhancing transparency and preventing conflicts of interest.
- Financial Innovation and Technology for the 21st Century Act: Proposed by Representative Thompson Glenn on July 20, 2023. This act aims to define whether cryptocurrencies are securities or commodities and expand regulatory oversight of the cryptocurrency industry.
These bills are currently under review and have yet to be passed. While market fluctuations and regulatory challenges exist in the actual implementation of these bills, the ideas are innovative and bold, offering thought-provoking insights for central banks worldwide. If Trump were to assume office, given his bold and innovative approach, the advancement of related legislation is expected to be rapid. After all, Trump discussed cryptocurrencies in a Fox Business interview on Friday. Trump emphasized the importance of U.S. leadership in the cryptocurrency space, suggesting the government could use Bitcoin to repay the $35 trillion national debt.
Reference Reports:
- https://www.lummis.senate.gov/wp-content/uploads/BITCOIN-Act-FINAL.pdf
- https://www.congress.gov/bill/117th-congress/senate-bill/5340?s=1&r=2
- https://www.congress.gov/bill/118th-congress/house-bill/4763
- https://www.congress.gov/bill/118th-congress/house-bill/5050/titles
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