U.S. Rep. Nick Begich (R-Alaska) and twenty other cosponsors introduced the American Reserve Modernization Act (ARMA) to formally create a strategic Bitcoin reserve.
Begich said sentiment around global reserves and alternatives has changed, and U.S. reserves need to be diversified to reflect the changes.
In a FOX Business interview, Begich added that gold dominates the precious metals in the same way Bitcoin does the crypto market.
If you look at Bitcoin, it represents about 60% of the total market cap for the entire crypto space. So the market has decided, in the case of gold and in the case of Bitcoin, that this will be the primary store of value within that asset class.
Congressman Pat Harrigan, another co-sponsor of the bill, reiterated that gold reserves anchored U.S. financial security for years. For him, a strategic Bitcoin reserve will reinforce the same for future generations.
There is still a long way to go for the Bitcoin reserve
To expand the BTC reserve without budget deficits, Begich suggested using it Iran has seized crypto assets alongside other ‘budget neutral’ strategies.
In particular, the US Treasury Department will be responsible for managing reserves with a minimum holding period of 20 years. Any future sales will be aimed at reducing the national debt.
The bill builds on the Bitcoin lawintroduced by pro-crypto Senator Cynthia Lummis (R-WY), who proposed the US own 1 million BTC, or 5% of the total BTC supply.
FundStrat’s Tom Lee applauded the move, drawing similarities to his ‘Alchemy of 5%’ for Ethereum.
That said, Conner Brown, director of lobbying firm Bitcoin Policy Institute, called the bipartisan support from the 21 lawmakers a “fantastic showing for Bitcoin.”
But pursuing a formal BTC reserve is still a tough task. For starters, the US government now owns 328,372 BTC, according to data from BitcoinTreasuries. The current stock is worth $25.5 billion and is a perfect starting point for the reserve, as Begich proposed.
However, of this, approximately 94K BTC will be sent back to the Bitfinex exchange. Moreover, its progress will remain uncertain unless the bill passes the committee threshold and advances to the final vote in the House of Representatives.
Plus, there are only two months left before the August congressional recess. Should the bill fail to pass before then, the midterm elections in November will derail the bill’s prospects.
In fact, the market estimated only a 34% chance that the Bitcoin reserve would be formalized before 2027. In other words, despite the recent FOMO, the bill’s prospects remain unclear.
Final summary
- Representative Nick Begich and 21 other lawmakers have introduced a bill to formally create a Bitcoin reserve for the US
- The bill aims to hold 5% of the total BTC supply for at least 20 years, with future sales aimed at paying down the national debt.