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US Bitcoin Reserves Would Be Funded In Part By Fed’s Gold Revaluation
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A strategic American bitcoin (BTC-USD) the reserve would finance cryptocurrency purchases in part by revaluing gold (XAUUSD:CUR) certificates held by the Federal Reserve, CoinDesk reported earlier this week, citing a proposed bill.
The legislation, proposed by Sen. Cynthia Lummis (R-WY) over the weekend at the Bitcoin Nashville conference, would require the Treasury to establish “a secure, decentralized Bitcoin network (BTC-USD) storage facilities located throughout the United States,” the bill states.
Lummis made his proposal shortly after former President and Republican candidate Donald Trump supported the idea to use the government’s current bitcoin reserves – acquired primarily through confiscations and seizures in criminal activity – as the basis for a new national strategic bitcoin (BTC-USD) reserve.
“The United States government is one of the largest holders of bitcoin. The federal government owns nearly 210,000 bitcoins, or 1 percent of the total supply that will ever exist,” Trump said toward the end of his speech.
Under the bill, a “bitcoin purchase program” would be established under the Treasury, through which up to 200,000 bitcoins (BTC-USD) would vest annually over a five-year period for a total of 1 million tokens, CoinDesk reported. The coins would be held for at least two decades and could only be sold for the purpose of paying down the federal debt. From there, no more than 10% of the assets could be sold over a two-year period.
The plan would also require allocating $6 billion of any net income transferred by the Fed to the Treasury for fiscal years 2025 through 2029. It would also reduce discretionary excess funds held by Fed banks to $2.4 billion from the $6.825 billion currently specified in the Federal Reserve Act.
Within six months of the law going into effect, Fed banks would submit all their gold in circulation (XAUUSD:CUR) certificates to the Treasury, according to the bill, CoinDesk “Within 90 days, the Treasury will issue new gold certificates to the Fed banks at the fair market value of gold. Then, the Fed banks will pay the Treasury the difference in cash between the old and new certificates.”
According to the latest Fed report updateThe Fed’s banks held a “gold stockpile” valued at $11.0 billion as of June 24, 2024.
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