Should Congress establish a bitcoin reserve?

Economy and Taxation Science and Technology
BITCOIN Act (S. 4912)
Awaiting Vote
Bill Summary

The "Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024" (BITCOIN Act of 2024) seeks to establish a U.S. Strategic Bitcoin Reserve, managed by the Treasury, to enhance national financial security and resilience in the evolving global economy. The bill outlines the creation of secure, decentralized storage facilities for Bitcoin, implementing transparent acquisition and management programs, including a plan to purchase up to 1 million Bitcoins over five years. It mandates long-term holdings, cryptographic audits, and safeguards for digital assets. Additionally, the Act provides a framework for states to store Bitcoin in segregated accounts and outlines funding strategies by leveraging Federal Reserve resources. Emphasizing financial innovation, it affirms private property rights, ensuring no infringement on individual Bitcoin holdings or self-custody. Sponsor: Sen. Cynthia Lummis (Republican, Wyoming)
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Opponents say

•    "Enter the idea of a Bitcoin strategic reserve. Best case? It signals that the U.S. is ready to lead in crypto, provide regulatory clarity, and position itself as the global hub for DeFi just as it has been for TradFi. Worst case? A Bitcoin strategic reserve signals doubt in the USD and our ability to sustain debt. This would be a terrible strategic misstep a gift to Russia and China, who’ve long sought to undermine the dollar’s global dominance. Issuing the reserve currency is an "exorbitant privilege." Losing it would mark the end of U.S. global superpower status just as it did for the Spanish real de ocho, Dutch guilder, French livre, and British pound before us." Source: Christian Catalini, co-founder and chief Strategy Officer at Lightspark and founder of MIT Cryptoeconomics Lab


•    "The volatility of Bitcoin would be a significant liability for the U.S. government if it were to hold reserves of this asset,” she tells Fast Company. “Bitcoin’s price can dramatically swing in short periods, driven by factors like market sentiment, regulatory changes, and broader economic trends." Source: Alisha Chhangani, Assistant Director at the Atlantic Council’s GeoEconomics Center 


•    "If the U.S. government actually established a Bitcoin reserve and bought 1 million Bitcoin, it might end up buying millions more. Since the U.S. government’s purchase of 1 million Bitcoin would drive the price so high, many HODLers, then worth millions or billions, would finally begin cashing out to spend their windfalls. That would cause the market to crash, forcing the U.S. government to print even more dollars to buy more Bitcoin to prevent the price from crashing, thereby diminishing the value of its Bitcoin reserve. Ultimately, so many dollars would be printed to buy Bitcoin that the U.S. would experience hyperinflation, rendering the dollar completely worthless." Source: Peter Schiff, Chief Economist & Global Strategist at Euro Pacific

Proponents say

•    "As families across Wyoming struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights, it is time for us to take bold steps to create a brighter future for generations to come by creating a strategic Bitcoin reserve. Bitcoin is transforming not only our country but the world and becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation. This is our Louisiana Purchase moment that will help us reach the next financial frontier." Source: Sen. Cynthia Lummis (Republican, Wyoming)


•    "For too long our government has violated the cardinal rule that every Bitcoiner knows by heart: Never sell your Bitcoin. If I am elected, it will be the policy of my administration, United States of America, to keep 100% of all the Bitcoin the U.S. government currently holds or acquires into the future." Source: President-Elect Donald Trump


•    "We want to make sure that we have the openness to having bitcoin as part of the Federal Reserve and as a reserve asset because of its potential for appreciation and because of its potential to allow America to set the financial standards." Source: Rep. Ro Khanna (Democrat, California, District 17)

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