How Senator Lummis’s 1 Million Bitcoin Purchase Plan Will Actually Play Out: Draft Bill
United States Senator Cynthia Lummis (R-Wyoming) revealed a draft bill to CoinDesk on July 31, outlining a plan to establish a federal stockpile of 1 million Bitcoin—a plan substantially different from what her initial comments suggested.
The proposed legislation, dubbed the “Bitcoin Act of 2024,” would establish a “Bitcoin Purchase Program” for the U.S. Treasury.
The Bitcoin Act of 2024 proposes establishing a US Strategic Bitcoin Reserve that would be financed in part by a revaluation of the #Fed’s #gold.
The #Bitcoin Purchase Program aims to deliver up to 200k #BTC /year over five yrs, reaching 1M BTC in total. The Bitcoin will be… pic.twitter.com/foqdApuG73
— Matthew Dixon – CEO Evai (@mdtrade) July 31, 2024
This program would authorize the acquisition of up to 200,000 BTC annually for five years, ultimately capping the federal Bitcoin reserve at 1 million BTC.
The path to funding these substantial purchases hinges on a bold proposition: reevaluating the U.S. government’s gold reserves held at Fort Knox. This revaluation seeks to capitalize on gold’s notable price appreciation over the past several decades.
As outlined in the legislation, the process would begin with Federal Reserve banks returning their existing gold certificates to the U.S. Treasury.
Subsequently, the Treasury would issue “new gold certificates” to these banks, reflecting the current fair market value of the gold. This process culminates in the Fed banks remitting the cash value difference between the old and new certificates to the Treasury Secretary.
As of July 25, the Federal Reserve’s balance sheet valued its gold stock at a mere $11 billion, seemingly based on the Federal Reserve Bank of New York’s outdated valuation of $42.22 per troy ounce.
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