The Bitcoin 2024 conference saw major announcements from GOP leaders, including a new Bitcoin Act of 2024. Find out how Republican leaders plan to integrate Bitcoin into the US economy and boost BTC reserves.
It’s official. Representatives of the Republican Party have unveiled plans for the US Strategic Bitcoin Reserve at the Bitcoin 2024 conference that took place last Saturday in Nashville.
Donald Trump, the Republican presidential nominee, made several pro-Bitcoin promises, including the one to retain all bitcoin seized from criminal activities. The US bitcoin stock currently amounting to 213,246 BTC, this promise is undoubtfully reassuring for the market.
Taking the stage after the former President, Wyoming Senator Cynthia Lummis presented a draft bill outlining the bitcoin purchase program that would further boost the country’s BTC reserves. It aims to buy 200,000 BTC every year over five years, for a total of 1 million BTC.
The synergy between Trump’s endorsement and Lummis’ proposal creates a powerful momentum. The media impact of Trump’s speech and his weight as a Republican presidential nominee give Lummis’ draft a boost and a higher probability of support within the GOP. Lummis’ program, in turn, gives more tangible support to Trump’s Bitcoin epiphany and creates a legislative foundation for including the leading crypto in the US economy.
This dual approach enhances the likelihood of securing broader support in Congress, potentially even attracting some backing from Democrats.
Here are the main points of Nashville’s historic event.
Key points of the Trump speech:
Donald Trump's speech was a blend of his usual bravado, his presidential program, and critiques of his opponents. True to his style, the former President's remarks elicited both applause and eye rolls within the crypto community.
However, the speech also included essential elements of the Bitcoin ethos, such as decentralization, and addressed the main ambitions and pain points of the industry, indicating that Trump was well-briefed on the topic. For example, his promise to fire SEC Chair Gary Gensler, crypto’s current archenemy, was met with such prolonged applause that Trump repeated it twice to savor the moment. Even if the SEC chair would typically be replaced with a new administration, the word "firing" resonated particularly well with the audience.
Trump has also outlined other initiatives:
"Drill baby, drill": the massive increase in oil production would provide Bitcoin miners with “all the electricity they need”
Appoint a Presidential Bitcoin Advisory Council tasked with producing comprehensive crypto regulations within 100 days.
Oppose a Central Bank Digital Currency (CBDC) as a threat to citizen’s personal freedom
Support the Right to Crypto Self-Custody
Create US Bitcoin Strategic Reserve: vowing to keep 100% of the Bitcoin currently held by the US government as a strategic national stockpile.
The Bitcoin Act of 2024
Lummis’ draft outlined the BTC buying program.
Under this draft, the Treasury Secretary would establish a "Bitcoin Purchase Program" of 1 million BTC over a five-year period. The coins would be held for at least 20 years and could only be sold to pay off federal debt (now amounting to $35 trillion). After the initial holding period, no more than 10% of the assets could be sold within any two-year span.
The bitcoin purchases would be financed through a few methods, including setting aside $6 billion from the net earnings remitted by the Fed to the Treasury from fiscal years 2025 to 2029. This would reduce the discretionary surplus funds of Federal Reserve banks from the current $6.825 billion to $2.4 billion.
The discretionary surplus funds of Federal Reserve banks act as a financial buffer to absorb unexpected losses and manage financial stability. The Fed uses this buffer notably for open market operations, discount lending, and quantitative easing.
Another financing method proposed in Lummis' draft is the reevaluation of the gold stock held by the Fed. While the Fed’s foreign reserve balance sheet currently shows only $11 billion of gold stock, this number is far from reality, as it values gold at only $42.22 per ounce. At today's price of $2,418.12 per ounce, the reevaluated U.S. gold stock would be approximately $632 billion – which could liberate $621 billion for BTC purchases.
Reducing the Fed's surplus funds and requiring it to remit the difference between the nominal and real market value of its gold to the Treasury would significantly diminish its influence on the country's monetary system. This would align well with the Republican agenda of deregulation. Moreover, using these funds to purchase bitcoin would make a powerful statement, both economically and politically.
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