US Senator Cynthia Lummis has reintroduced the BITCOIN Act, a legislative proposal to establish a Strategic Bitcoin Reserve. This initiative underscores the importance of enhancing the United States’ financial stability amidst growing national debt and the uncertain status of the dollar as a global reserve currency.
Creation of the Strategic Bitcoin Reserve
Under the BITCOIN Act, the US government could acquire up to a million Bitcoins over five years. This acquisition scheme includes about 5 percent of all existing Bitcoin. The national digital asset reserve created through this initiative aims to match the existing gold reserves of the nation.
Challenges of Growing National Debt
Lummis explained to the Senate Banking Subcommittee on Digital Assets that the growing federal debt is a critical motivation for advancing the bill. She believes that protecting the dollar’s status as a global reserve currency requires supporting economic competitiveness. The proposal comes after BlackRock's CEO Larry Fink warned about the risks posed by increasing debt payments, which could undermine confidence in the US dollar.
Legislation and Executive Order
The bill also codifies an executive order signed by President Trump in March that established the Strategic Bitcoin Reserve. Under the order, the reserve will include Bitcoins seized through legal proceedings. The Department of the Treasury will manage the reserve through decentralized and secure Bitcoin vaults, respecting private ownership and self-custody rights.
With executive support and heightened interest in economic measures, Lummis aims to gain legislative approval in the current session. Her proposal highlights the need to strengthen the dollar and reduce the US debt burden.
