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The Bitcoin Purchase Plan proposed by Senator Cynthia Lummis involves the US buying 200,000 Bitcoin every year for the next five years, resulting in a total accumulation of 1 million BTC.
After proposing to hold Bitcoins as part of the US strategic reserves, Wyoming Senator Cynthia Lummis has finally come out with a draft bill explaining how to execute the Bitcoin purchases.
As per the draft legislation from Lummis’s office, the Senator has proposed to revalue the Federal Reserve’s gold in order to partly finance the BTC strategic reserve.
The bill “BITCOIN Act of 2024”, notes that “Bitcoin as a decentralized and scarce digital asset, offers unique properties that complement existing national reserves, strengthening the position of the United States dollar in the global financial system”.
As said, the draft bill proposes the revaluation of the Fed’s gold certificate in order to reflect their fair market value. As per the plan, all the Fed banks in the US would submit their Gold certificates to the Treasury Secretary within six months of the legislation’s enactment.
90 days thereafter, the Treasury Secretary would issue new gold certificates to the Federal Reserve banks, reflecting the fair market value of the gold. The Federal Reserve banks would then remit the difference in cash value between the old and new certificates to the Treasury Secretary.
As of July 24, the Federal Reserve banks are holding gold worth $11 billion, as per the central bank’s most recent balance sheet update.
The Bitcoin Purchase Plan Offered by Cynthia Lummis
The draft bill includes a section dubbed “Bitcoin Purchase Program” that the US will purchase 200,000 Bitcoin every year for the next five years, resulting in a total accumulation of 1 million BTC. As per the draft bill, the US Treasury Department will publish quarterly reports while making them public on the website. Furthermore, states can also participate in holding Bitcoins as part of the reserves while adhering to certain requirements including some security protocols.
The plan talks about allocating $6 billion from the net earnings of the Federal Reserve, remitted to the Treasury from fiscal years 2025 through 2029. It also seeks to reduce the discretionary surplus funds of the Federal Reserve Banks, from the existing $6.825 billion to $2.4 billion, as stipulated in the Federal Reserve Act.
Wyoming’s Republican Senator Cynthia Lummis has been known for her Bitcoin-friendly stance for years now. With BTC receiving a strong push from Presidential Candidate Donald Trump, Lummis takes this opportunity to take her Bitcoin agenda further.
The Wyoming Senator said that although she would introduce the bill, it won’t pass into law this year. Thus, she expects the bill to be signed into law following the US elections in November.
