Senator Lummis Reintroduces Bill for 1 Million Bitcoin National Reserve

Senator Cynthia Lummis has reintroduced a bill aimed at establishing a national strategic Bitcoin reserve for the United States. The proposed legislation, known as the "Bitcoin Reserve Act," seeks to create a reserve of 1 million Bitcoin units, which would constitute 5% of the total Bitcoin supply. This initiative is designed to be funded without increasing the burden on taxpayers, by reallocating resources from the Federal Reserve System and the Treasury Department.

The bill outlines a five-year plan for the government to purchase Bitcoin, with the acquired assets to be transferred to secure storage facilities within a decentralized network. Unlike the executive order issued by Trump, which focused on building a reserve using seized digital assets, Lummis's bill proposes a more proactive approach. It suggests utilizing existing funds within the Federal Reserve system, specifically allocating $60 billion annually from reserve banks between 2025 and 2029 to finance the Bitcoin purchases. Additionally, the bill explores the potential use of Federal Reserve gold certificates as a funding source.

Lummis views Bitcoin as a strategic national asset, emphasizing its role in maintaining America's financial leadership in the 21st century. She believes that by converting the president's visionary executive action into lasting legislation, the country can fully leverage digital innovation to address national debt while maintaining global economic competitiveness.

The bill has garnered bipartisan support, with co-sponsors including Republican Senators Jim Justice, Tommy Tuberville, Roger Marshall, Marsha Blackburn, and Bernie Moreno. This bipartisan backing could enhance the bill's chances of gaining traction in Congress. Reports also indicate growing support within the House of Representatives, with at least seven representatives endorsing Lummis's plan.

While both Lummis's bill and Trump's executive order aim to establish a Bitcoin reserve, they differ in key aspects. Trump's order primarily envisioned a reserve built from seized digital assets, whereas Lummis's legislation proposes market purchases funded through the Federal Reserve. Trump's plan, as outlined by his AI and cryptocurrency advisor David Sacks, is described as "budget-neutral," relying on seized assets rather than direct taxpayer expenditure. However, Trump's order also directs the Treasury and Commerce departments to explore additional budget-neutral strategies for acquiring Bitcoin, which could potentially overlap with Lummis's approach of open market purchases.

The response from the cryptocurrency industry to the renewed push for a Bitcoin strategic reserve has been largely positive. Many supporters see it as a validation of Bitcoin's importance and a sign of mainstream acceptance. However, some analysts caution that the government holding non-Bitcoin digital assets as part of a broader "digital asset inventory" could be problematic, given Bitcoin's unique properties that make it the most suitable cryptocurrency for national reserves. The distinction made by the Trump administration between a Bitcoin reserve and a separate digital asset inventory may be an attempt to address these concerns.

In the coming weeks, Senator Lummis and her co-sponsors are expected to actively promote the Bitcoin Reserve Act, aiming to secure further support in Congress and educate decision-makers and the public about the potential benefits of a national strategic Bitcoin reserve. The bill's success could significantly impact the future of digital assets in the United States, potentially setting a precedent for other nations to follow. The strategic reserve, if established, would not only bolster the country's financial stability but also position the United States as a leader in the global digital economy.