U.S. Moves Toward a Strategic Bitcoin Reserve with Lummis’ Bill

The U.S. government could become one of the largest Bitcoin holders if the BITCOIN Act 2025, introduced by Senator Cynthia Lummis, is approved. The bill proposes the creation of a Strategic Bitcoin Reserve, requiring the government to purchase 200,000 BTC annually for five years, accumulating a total of 1 million BTC under state custody.

Lummis stated that this initiative aims to position the U.S. as a leader in the digital economy while reinforcing financial stability. Securing a national Bitcoin reserve will strengthen the economy and protect the U.S. financial system.

The bill also codifies Donald Trump’s executive order, which had already established the foundation for a Bitcoin reserve. While Trump’s order allowed Bitcoin accumulation, Lummis’ proposal makes it a mandatory annual acquisition, setting a fixed purchase mechanism.

Market and Economic Impact

The U.S. government’s purchase of 200,000 BTC per year would introduce significant demand into the Bitcoin market. At current rates, this amount represents a substantial portion of the annual newly mined BTC supply, potentially affecting global Bitcoin liquidity and distribution.

Financially, this move could influence the country’s reserve policy. The U.S. currently holds over 8,100 metric tons of gold as a strategic reserve, and the addition of Bitcoin would introduce a new digital asset into its financial strategy.

The proposal also raises questions regarding its impact on monetary policy. Unlike traditional reserve assets, Bitcoin operates outside of central banking systems and cannot be issued or manipulated by monetary authorities, which could require adjustments in financial stability strategies.

Reactions from the Financial Sector

The bill has generated interest across various sectors. Banks and financial institutions have pointed out the need for a clear regulatory framework for state-level Bitcoin custody and storage. The Federal Reserve and the Treasury Department have not issued official statements on the initiative, though they have previously stated that Bitcoin is not considered a conventional reserve asset.

Politically, the bill has bipartisan support and is co-sponsored by Jim Justice, Tommy Tuberville, Roger Marshall, Marsha Blackburn, and Bernie Moreno. Congressional sources suggest that this version has stronger backing than previous attempts, increasing its chances of progressing through the legislative process.

Challenges and Considerations

The storage and security of 1 million BTC pose logistical challenges. Protecting these assets requires advanced security measures to prevent cybersecurity risks and unauthorized access.

Another key aspect is the restriction on selling these reserves. According to the bill, the BTC acquired could only be liquidated under specific circumstances, such as national financial emergencies. This implies the need for a reserve management protocol to determine under what conditions the holdings could be utilized.

If passed, the U.S. government would become one of the world’s largest Bitcoin holders, reinforcing institutional adoption and setting a major precedent in the relationship between nation-states and Bitcoin.