Senator Cynthia Lummis, a Republican from Wyoming, has reintroduced the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act in the U.S. Senate as of March 2025. This legislation aims to establish a Strategic Bitcoin Reserve, codifying an executive order by President Donald Trump to enhance America’s financial security and global competitiveness.
The BITCOIN Act proposes that the U.S. Treasury acquire up to 1 million Bitcoins over five years, mirroring the strategic importance of U.S. gold reserves, with a mandatory 20-year holding period. The reserve would be managed through a decentralized network of secure Bitcoin vaults, ensuring transparency with independent proof-of-reserve audits. Funding for the program would come from existing Federal Reserve and Treasury resources, including adjustments to Federal Reserve remittances and revaluation of gold certificates, without imposing new taxpayer burdens.
The legislation also affirms the self-custody rights of private Bitcoin holders, emphasizing financial freedom, and allows states to voluntarily establish their own Bitcoin reserves in segregated accounts. It has garnered support from several Republican senators, including Jim Justice, Tommy Tuberville, Roger Marshall, Marsha Blackburn, and Bernie Moreno, with companion legislation introduced in the House by Representative Nick Begich.
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Senator Lummis, known for her pro-Bitcoin stance, views this as a transformative step to address national debt and maintain U.S. leadership in financial innovation. However, the bill faces challenges, including skepticism about Bitcoin’s volatility, its economic impact relative to the U.S. debt, and the need for broader bipartisan support to pass through Congress.
The bill proposes adjustments to the Federal Reserve’s surplus remittances to the Treasury, redirecting these funds to finance Bitcoin purchases. The Treasury would revalue its gold certificates held against the Federal Reserve to generate additional funds. The bill allows the use of other non-taxpayer-funded Treasury resources, though specifics on these sources are not fully detailed in public summaries.
The legislation affirms the right of private individuals and entities to self-custody their Bitcoin, ensuring that the government’s actions do not infringe on personal financial freedom or property rights. This provision is intended to assuage concerns among Bitcoin holders and the broader cryptocurrency community about potential government overreach. The bill allows states to voluntarily establish their own Bitcoin reserves in segregated accounts, separate from the federal reserve. States would have autonomy in managing these reserves, potentially using them for economic development, debt reduction, or other state-specific financial strategies.
Proponents of the bill argue that holding Bitcoin as a strategic asset could help address the U.S. national debt (currently over $35 trillion) by diversifying reserve assets and potentially benefiting from Bitcoin’s long-term appreciation. The bill positions Bitcoin as a transformative financial technology, aiming to keep the U.S. competitive in the global financial system, particularly as other nations (e.g., China, El Salvador) explore digital currencies and blockchain technologies. Bitcoin is viewed by supporters as a potential hedge against inflation and currency devaluation, complementing traditional reserves like gold.
If enacted, the U.S. government’s purchase of 1 million Bitcoins could significantly influence Bitcoin’s market price, given its current circulating supply of approximately 19.8 million coins (as of late 2024). This represents about 5% of the total supply, potentially driving up demand and price. Proponents argue that Bitcoin’s historical appreciation (averaging over 100% annualized returns in some periods) could generate significant returns, helping offset the U.S. national debt. However, critics highlight Bitcoin’s volatility, with potential for substantial losses during market downturns.
By holding Bitcoin, the U.S. could position itself as a leader in digital asset adoption, potentially influencing other nations to follow suit. However, this could also challenge the dominance of the U.S. dollar as the world’s reserve currency if Bitcoin gains wider acceptance. The bill has primarily Republican support, aligning with a broader GOP narrative of economic innovation, deregulation, and skepticism of centralized financial systems. Democrats have expressed mixed views, with some supportive of cryptocurrency innovation but others concerned about environmental impacts, financial risks, and consumer protection.
