US Senator Cynthia Lummis introduced the “Bitcoin Act of 2024” for a Congressional vote, proposing the establishment of a strategic reserve of the leading cryptocurrency in the country.
“[The proposal] aims to create a strategic bitcoin reserve and other programs to ensure transparent management of the federal government’s bitcoin assets, offset expenses using certain Federal Reserve System (FRS) resources, and other purposes,” the document states.
The initiative’s goal is the “generation, storage, and management of private keys associated with government bitcoin assets.”
The bill proposes the purchase of 1 million BTC (no more than 200,000 BTC per year over five years). The Federal Reserve’s gold reserves will be used for these purposes.
The digital assets will be held for a minimum of 20 years, although exceptions are provided in the document. Responsibility for the security and monitoring of the cryptocurrency will be assigned to a so-called “secretary,” who is also required to establish a proof-of-reserves system.
“The secretary must ensure the geographical distribution of [reserve] facilities across the United States to minimize the risk of simultaneous compromise and enhance resilience,” the bill states.
Additionally, after the minimum holding period, the secretary should not recommend selling more than 10% of the reserve’s assets within a two-year period.
The bill also introduces several terms, including “airdrop,” “bitcoin purchase program,” “cold storage,” and “fork.” Most of these align with established definitions. However, where a broader term like “cryptocurrency” is needed, “bitcoin” is used instead.
For example, an airdrop is defined as “the gratuitous distribution of digital assets among bitcoin holders in a large-scale, fair, and non-discretionary manner.”
Previously, Galaxy Digital head Mike Novogratz predicted a digital gold price of $500,000 if a strategic reserve is created in the US. However, he fears that inter-branch conflicts might hinder its establishment.
Earlier, MicroStrategy founder Michael Saylor called a bitcoin reserve “the best deal of the 21st century.”