As a seasoned researcher with a background in both finance and technology, I find Senator Cynthia Lummis’ draft bill intriguing. Having closely followed the evolving landscape of digital currencies and their potential impact on traditional financial systems, it’s fascinating to see a proposal that seeks to integrate Bitcoin into the US strategic reserves.
Following her proposal for incorporating Bitcoins into the U.S. strategic reserves, Senator Cynthia Lummis from Wyoming has now presented a draft bill detailing the methods for executing Bitcoin acquisitions.
According to a draft bill from Senator Lummis’s office, he suggests adjusting the value of the Federal Reserve’s gold as part of the plan to partially fund a strategic Bitcoin reserve.
As a researcher, I’ve been exploring the potential impact of the “BITCOIN Act of 2024.” This legislation recognizes Bitcoin as a distinct, limited digital asset with exceptional qualities that can complement existing national reserves. These attributes are believed to bolster the United States dollar’s standing within the global financial system.
According to the proposal, the Federal Reserve’s gold certificates would be reassessed to match their current market worth. Once the law is passed, all Federal Reserve banks across the United States will have six months to submit their gold certificates to the Treasury Secretary.
In three months’ time, the Treasury Secretary will issue updated gold certificates to the Federal Reserve banks, representing the current market price of the gold. Subsequently, the Federal Reserve banks will send the Treasury Secretary the cash difference between the value of the old and new certificates.
Starting from July 24th, the latest data from the Federal Reserve indicates that they have approximately $11 billion in gold holdings.
The Bitcoin Purchase Plan Offered by Cynthia Lummis
The proposed legislation contains a segment called the “Yearly Bitcoin Acquisition Plan,” whereby the U.S. government plans to buy 200,000 Bitcoins annually over the next five years, amassing a total of 1 million BTC. According to the bill, the U.S. Treasury Department will release quarterly reports and make them publicly available on their website. Additionally, states are given the option to join in holding Bitcoins as part of their reserves, provided they meet specific conditions such as certain security measures.
As a crypto investor, I’m keeping an eye on the proposed plan that intends to redirect $6 billion annually from the Federal Reserve’s net earnings, starting from fiscal years 2025 through 2029, and send it to the Treasury. Moreover, this plan aims to lower the discretionary surplus funds held by the Federal Reserve Banks, reducing them from the current $6.825 billion to a proposed $2.4 billion, as per the Federal Reserve Act.
For quite some time, Senator Cynthia Lummis of Wyoming, a Republican, has been recognized for her supportive stand on Bitcoin. With Bitcoin gaining significant momentum under the endorsement of Presidential candidate Donald Trump, Senator Lummis leverages this moment to advance her Bitcoin-related plans even more.
The senator from Wyoming mentioned that she plans to present the bill, but she doesn’t anticipate it becoming a law this year. Instead, she believes the bill will be officially enacted after the U.S. elections in November.
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2024-07-31 14:45