US Government Could Buy Up to 1 Million BTC Over Five Years and Commit to Holding It for 20 Years

The U.S. could establish a strategic Bitcoin (BTC) reserve during Donald Trump's second presidential administration, according to a report from Decrypt on Nov. 8.

U.S. Senator Cynthia Lummis (R-WY) has proposed a plan to establish a strategic Bitcoin (BTC) reserve during Donald Trump’s second presidential administration, Decrypt reported on Nov. 8.

The Republican senator told Decrypt that Trump has shown that he can be “the most pro-Bitcoin and pro-crypto president” in American history. She added that a Bitcoin reserve would “supercharge the U.S. dollar’s position as the world reserve currency” for years to come.

Earlier, Lummis spearheaded a bill to set up a federal Bitcoin reserve. She announced the plans in a July 27 press release and introduced the bill in the U.S. Senate on July 31.

The bill is officially named the BITCOIN Act of 2024, which stands for “Boosting Innovation, Technology, and Competitiveness Through Optimized Investment Nationwide Act.”

It proposes that the U.S. Treasury Secretary create, oversee, and audit a decentralized network of secure storage facilities for the government’s Bitcoin holdings.

The Treasury Secretary would also set up a Bitcoin Purchase Program that enables the purchase of up to 200,000 BTC per year over five years. This would allow the government to acquire as much as 1 million BTC in total. The funds would be held for at least 20 years, at which point the strategy would be reconsidered.

Lummis told Decrypt that the government would pay for Bitcoin by reallocating other funds in the Federal Reserve, not by creating additional debt.

She said the strategy would be similar to the Treasury’s current role in managing gold reserves, which is separate from the Federal Reserve system. Lummis added that the Bitcoin reserve could serve as a “modern parallel to our gold stockpile” and a hedge against economic instability for the digital era.

Lummis’ BITCOIN Act has not advanced since being introduced in the Senate in July. She told Decrypt that she sees the next Congress as an optimal time to advance the BITCOIN Act and other crypto legislation.

However, other sources cited by Decrypt describe skepticism among senators and representatives, making the bill's success far from guaranteed.

Finally, Trump’s commitment to such a plan remains unclear. On July 27, before Lummis' announcement, Trump told attendees of the Nashville Bitcoin 2024 conference that the U.S. government will "keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future" and not sell it.

While Decrypt has called Trump’s statement a promise to build a “strategic Bitcoin stockpile,” other reports from CNBC suggest that Trump's statement only applies to current holdings. Moreover, despite the close timing between Trump and Lummis' statements, the precise connection between each plan is unclear.

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