As countries around the world pay more and more attention to digital assets, the United States is also actively exploring how to maintain its leading position in this field . Against this background, Senator Cynthia Lummis proposed the BITCOIN Act of 2024 on July 31. The bill aims to enhance the financial security and leadership of the United States by establishing a national Bitcoin reserve.
I. Contents of the Act
By incorporating Bitcoin into the national asset reserve, this bill hopes to provide the United States with a tool to combat economic uncertainty and monetary instability and enhance the country's financial resilience. The following is the content of the bill compiled by Aiying:
1. Bitcoin purchasing plan
The bill establishes a "Bitcoin Purchase Program" to purchase no more than 200,000 bitcoins per year for five years, for a total of 1,000,000 bitcoins. This will account for approximately 5% of the total supply of Bitcoin. The purchase process will be conducted transparently and strategically to minimize disruption to the market. The goal of this program is to ensure that the U.S. government can hold a large amount of Bitcoin for the next twenty years, providing the country with a long-term financial hedging tool.
2. Establishment of safe storage facilities
To ensure the safe storage of Bitcoin, the bill requires the establishment of a decentralized network of Bitcoin secure storage facilities. This network will be managed by the U.S. Treasury and distributed across the country to enhance the security and resilience of reserves. Each storage facility will adopt the most advanced physical and digital security measures to ensure that Bitcoin reserves are protected from unauthorized access and attacks.
3. Source of funds for purchase
The bill proposes to use existing funds from the Federal Reserve System and the Treasury Department to purchase Bitcoin. Specific methods include revaluing the Federal Reserve's gold certificates to reflect the market value of gold and using the difference to purchase Bitcoin. In addition, the bill also plans to reduce the Federal Reserve Bank's free surplus funds and use part of the saved funds for the Bitcoin purchase plan.
4. Holding period and usage rules
According to the bill, the bitcoins purchased by the government will be held for at least 20 years. During this period, these bitcoins cannot be sold, exchanged or auctioned unless used to repay national debt. After the initial holding period, no more than 10% of the reserves can be sold every two years. This rule is designed to ensure the long-term stability of Bitcoin reserves while providing some flexibility to respond to future economic needs.
5. Fighting economic uncertainty and monetary instability
By incorporating Bitcoin into the national asset reserve, the bill hopes to provide the United States with an effective tool to combat economic uncertainty and monetary instability. As a decentralized and limited supply digital asset, Bitcoin has unique anti-inflation and risk-averse functions. Holding Bitcoin can not only enhance the country's financial resilience, but also maintain its leading position in global financial innovation, ensuring that the United States is in a favorable position in future economic competition.
Through the above measures, the "U.S. Bitcoin Strategic Reserve Act" strives to provide the United States with new financial security guarantees in the digital economy era and promote the modernization and diversification of the country's financial system.
2. Current progress of various virtual currency-related proposals in the United States
Each Congress typically receives thousands of bill proposals, and so far in the 118th Congress (2023-2024): more than 9,235 bills and 1,398 resolutions have been submitted, and only a portion of them will eventually pass and become law.
Any member of Congress can propose a bill. Once a bill is submitted, it is assigned to the relevant committee for review and discussion. The committee can hold hearings, revise the bill, and then decide whether to send it to the full House for consideration. For a bill to become law, it needs to go through multiple steps, including discussion and voting in the house where the bill was proposed (House of Representatives or Senate), and then the same process in the other house. After both houses pass the bill, it is sent to the president to sign it into law. If the president vetoes it, Congress can override the president's veto with a two-thirds majority vote.
According to Aiying, in recent years, the U.S. Congress has proposed a number of bills related to virtual currencies:
Digital Asset Market Structure and Investor Protection Act: Introduced by Congressman Don Beyer on July 28, 2021, the bill aims to create a comprehensive digital asset regulatory framework covering stablecoins, decentralized finance (DeFi), and the regulation of cryptocurrency exchanges. For more information, please read "Interpreting the Digital Asset Bill that may be introduced before the US presidential election in 24 years"
Stablecoin TRUST Act: Introduced by Senator Pat Toomey on December 21, 2022. The bill aims to create a federal and state regulatory framework for the issuance of stablecoins, ensure the capital and reserve requirements of stablecoins, and support the status of the US dollar as a digital transaction medium. For details, please read "What does the US Stablecoin Act mean for the regulatory market?"
Cryptocurrency Accountability Act: Introduced on July 27, 2023 by Rep. Elissa Slotkin (D-Calif.), the bill would require members of Congress to disclose their cryptocurrency holdings to increase transparency and prevent conflicts of interest.
Financial Innovation and Technology for the 21st Century Act: Introduced by Congressman Thompson Glenn on July 20, 2023, it aims to define whether cryptocurrencies are securities or commodities and expand regulators' oversight of the cryptocurrency industry. For details, please read "Is it significant that Illinois confirms that BTC and ETH are digital commodities? What is its actual regulatory policy?"
The above bills are still under review and have not been passed yet. There are market fluctuations and regulatory challenges in the actual implementation of the bills, but the ideas are still very innovative and bold, giving central banks around the world some ideas to think about. If Trump comes to power, with his bold and innovative thinking, it is expected that the relevant bills will be promoted very quickly. After all, Trump discussed cryptocurrency in an interview with Fox Business on Friday. Trump emphasized the importance of the United States' leading position in the field of cryptocurrency, suggesting that the government could use Bitcoin to repay the $35 trillion national debt.
Reference report:
https://www.lummis.senate.gov/wp-content/uploads/BITCOIN-Act-FINAL.pdf
https://www.congress.gov/bill/117th-congress/senate-bill/5340?s=1&r=2
https://www.congress.gov/bill/118th-congress/house-bill/4763
https://www.congress.gov/bill/118th-congress/house-bill/5050/titles
