118 S4912 IS: Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024
U.S. Senate
2024-07-31
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
II
118th CONGRESS
2d Session
S. 4912
IN THE SENATE OF THE UNITED STATES
July 31, 2024
Ms. Lummis introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To establish a Strategic Bitcoin Reserve and other programs to ensure the transparent management of Bitcoin holdings of the Federal Government, to offset costs utilizing certain resources of the Federal Reserve System, and for other purposes.
1.

Short title
This Act may be cited as the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” or the “BITCOIN Act of 2024”.
2.

Findings
Congress finds the following:
(1)
The global financial landscape is rapidly evolving, with digital assets playing an increasingly significant role in the world economy.
(2)
Bitcoin has demonstrated resilience, widespread adoption, and served as a medium of exchange and a store of value for more than a decade.
(3)
Just as gold reserves have historically served as a cornerstone of national financial security, Bitcoin represents a digital-age asset capable of enhancing the financial leadership and security of the United States in the 21st century global economy.
(4)
The acquisition and long-term storage of substantial quantities of Bitcoin by the United States can strengthen the financial condition of the United States, providing a hedge against economic uncertainty and monetary instability.
(5)
Bitcoin, as a decentralized and finitely scarce digital asset, offers unique properties that complement existing national reserves, strengthening the position of the United States dollar in the global financial system.
(6)
Diversification of the national assets of the United States to include Bitcoin can enhance financial resilience and position the United States at the forefront of global financial innovation.
3.

Definitions
In this Act:
(1)

Airdrop
The term airdrop means a gratuitous distribution of digital assets to holders of Bitcoin in a broad, equitable, and non-discretionary manner.
(2)

Bitcoin Purchase Program
The term Bitcoin Purchase Program means the program established under section 5(a).
(3)

Cold storage
The term cold storage means a method of storing private keys required to transact in Bitcoin, with a nexus to a secure physical location, protected from unauthorized access and isolated from any network connections.
(4)

Fork
The term fork means a change to the consensus mechanism of a distributed ledger that creates a separate ledger, resulting in a new digital asset that shares a common transaction history with Bitcoin up to the point of the change.
(5)

Secretary
The term Secretary means the Secretary of the Treasury.
(6)

Strategic Bitcoin Reserve
The term Strategic Bitcoin Reserve means the decentralized network of secure Bitcoin storage facilities established pursuant to section 4(a).
4.

Establishment of Strategic Bitcoin Reserve
(a)

Establishment
The Secretary shall establish a decentralized network of secure Bitcoin storage facilities distributed across the United States, collectively to be known as the Strategic Bitcoin Reserve for the cold storage of Government Bitcoin holdings.
(b)

Purpose
The Strategic Bitcoin Reserve shall be used for the generation, safekeeping, and management of Bitcoin private keys associated with Government Bitcoin holdings.
(c)

Oversight
The Secretary shall be responsible for the ongoing monitoring and auditing of the holdings of the Strategic Bitcoin Reserve.
(d)

Decentralization
(1)

In general
The Secretary shall ensure that the facilities of the Strategic Bitcoin Reserve are geographically dispersed throughout the United States, to minimize the risk of simultaneous compromise and to enhance the resilience of the Strategic Bitcoin Reserve.
(2)

Location selection
The Secretary shall select the locations for the facilities described in paragraph (1) based on a comprehensive risk assessment, prioritizing geographic diversity, security, and accessibility.
(e)

Security measures
(1)

In general
The Secretary shall implement state-of-the-art physical and digital security measures to protect the Strategic Bitcoin Reserve.
(2)

Consultation
The Secretary shall consult and collaborate with the Secretary of Defense, the Secretary of Homeland Security, and industry experts to ensure the highest level of physical and digital security for the Strategic Bitcoin Reserve.
(f)

Retention of forks and airdrops
(1)

In general
The Secretary shall ensure that, with respect to Bitcoins controlled by the Strategic Bitcoin Reserve, all digital assets resulting from forks of the Bitcoin distributed ledger and digital assets distributed via airdrops to Bitcoin addresses are accounted for and reasonably stored in the Strategic Bitcoin Reserve.
(2)

Prohibition on immediate sale
No digital asset stored in the Strategic Bitcoin Reserve that is the result of a fork or airdrop may be sold or otherwise disposed of during the 5-year period beginning on the date of the fork or airdrop, unless explicitly authorized by law.
5.

Bitcoin Purchase Program
(a)

Establishment
(1)

In general
The Secretary shall establish a Bitcoin Purchase Program which shall—
(A)
purchase not more than 200,000 Bitcoins per year over a 5-year period, for a total acquisition of 1,000,000 Bitcoins;
(B)
conduct purchases in a transparent and strategic manner to minimize market disruption; and
(C)
hold Bitcoin acquired under this section in trust for the United States, as provided in this section.
(2)

Flexibility relating to purchases
The Secretary shall, by rule, establish a procedure to adjust the purchase schedule set forth under paragraph (1), if necessary, based on prevailing market conditions.
(3)

Transfer offset
Any Bitcoin transferred to the Strategic Bitcoin Reserve under section 7 may offset the purchase requirements under paragraph (1).
(b)

Deposit
All Bitcoins purchased under the Bitcoin Purchase Program shall be placed in the Strategic Bitcoin Reserve.
(c)

Minimum Holding Period
(1)

In general
To ensure the long-term stability and security of the Strategic Bitcoin Reserve, the Secretary shall hold all Bitcoin acquired through the Bitcoin Purchase Program for not less than 20 years.
(2)

Retention of Bitcoin
During the minimum holding period under paragraph (1), no Bitcoin held in the Strategic Bitcoin Reserve may be sold, swapped, auctioned, encumbered, or otherwise disposed of for any purpose other than retiring outstanding Federal debt instruments.
(3)

Recommendations after holding period
(A)

In general
On the date that is 1 year before the end of the minimum holding period under paragraph (1), the Secretary shall submit to Congress recommendations on whether to continue to voluntarily hold or to allow for the gradual and controlled release of a portion of the holdings of the Strategic Bitcoin Reserve.
(B)

Recommendation
Upon the expiration of the minimum holding period, the Secretary shall not recommend selling more than 10 percent of the assets of the Strategic Bitcoin Reserve during any 2-year period.
(d)

Public reports
Not later than 1 year after the date of enactment of this Act, and annually thereafter for a period of 20 years, the Secretary shall publish an annual public report on the status of the Bitcoin Purchase Program.
6.

Proof of Reserve System
To ensure transparency and accountability in the management of the Strategic Bitcoin Reserve, the Secretary shall establish a quarterly Proof of Reserve system of public cryptographic attestation under which—
(1)
the Secretary shall—
(A)
publish quarterly reports on the Strategic Bitcoin Reserve that include detailed information on the total holdings, transactions, and demonstrated control of private keys relating to the Strategic Bitcoin Reserve, including a public cryptographic attestation;
(B)
make the quarterly reports available to the public on an official website of the Department of Treasury; and
(C)
select an independent, third-party auditor with expertise in cryptographic attestations to verify the accuracy and integrity of the quarterly reports; and
(2)
the Comptroller General of the United States shall, to ensure compliance with this Act, conduct regular oversight of—
(A)
the Strategic Bitcoin Reserve;
(B)
the quarterly reports under paragraph (1)(A); and
(C)
the audits under paragraph (1)(C).
7.

Consolidation of Government Bitcoin Holdings
Beginning on the date of enactment of this Act, any Bitcoin under the control of any Federal agency, including the United States Marshal Service, shall—
(1)
not be sold, swapped, auctioned, or otherwise encumbered; and
(2)
upon the acquisition of legal title to such Bitcoin (including after a final, unappealable judgment is entered in a criminal or civil forfeiture action in favor of the Federal agency), be transferred by the head of such Federal agency to the Strategic Bitcoin Reserve.
8.

Voluntary State Participation and Segregated Accounts
(a)

Voluntary State participation
The Secretary shall establish a program that allows a State to voluntarily participate in storing the Bitcoin holdings of the State in the Strategic Bitcoin Reserve in a segregated account.
(b)

Participation requirements
A State choosing to participate in the program established under subsection (a) shall sign a contractual agreement outlining the terms and conditions of participation, which shall include—
(1)
the responsibilities of both the State and the Strategic Bitcoin Reserve in managing and securing the Bitcoin holdings of the State in the segregated account of the State;
(2)
a requirement that the State, in coordination with the Secretary, develop and implement appropriate security protocols and access controls to ensure the integrity and confidentiality of the segregated account of the State; and
(3)
retention of title, and all attendant legal interests, by the State in the Bitcoin held in the segregated account, including title to any digital asset that is the result of a fork or airdrop relating to such Bitcoin.
(c)

Withdraw or transfer
Each State participating in the program established under subsection (a) shall have the right to withdraw or transfer the contents of the segregated account of the State within the Strategic Bitcoin Reserve, subject to the terms and conditions in the signed contractual agreement under subsection (b) and any applicable Federal regulations.
9.

Offsetting the cost of the strategic Bitcoin reserve
(a)

Discretionary surplus funds of federal reserve banks
Section 7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by striking “$6,825,000,000”and inserting “$2,400,000,000”.
(b)

Use of remittances to treasury
(1)

In general
Notwithstanding the second subsection (b) of section 7 of the Federal Reserve Act (12 U.S.C. 290), for fiscal years 2025 through 2029, if the Federal reserve banks remit net earnings to the general fund of the Treasury during that period, the first $6,000,000,000 of these remittances (before repayment of any deferred asset) in a fiscal year shall be utilized by the Secretary for the implementation of the Bitcoin Purchase Program, pursuant to the purposes set forth under section 5.
(2)

Exception
Paragraph (1) shall not apply if the Federal Reserve banks do not remit net earnings in any given fiscal year during the period of fiscal years 2025 through 2029.
(c)

Federal reserve system gold certificates
Not later than 180 days after the date of enactment of this Act, the Federal reserve banks shall tender all outstanding gold certificates in their custody to the Secretary. Not later than 90 days after the tender of the last such certificate, the Secretary shall issue new gold certificates to the Federal reserve banks that reflect the fair market value price of the gold held against such certificates by the Treasury, as of the date specified by the Secretary on each new gold certificate. Upon issue by the Secretary, each Federal reserve bank that receives a new gold certificate shall remit the difference in cash value between the old and new gold certificates to the Secretary for deposit in the general fund within 90 days.
(d)

Conforming amendment
Section 5117(b) of title 31, United States Code, is amended by striking “(for the purpose of issuing those certificates, of 42 and two-ninths dollars a fine troy ounce)”.
10.

Protection of Private Property Rights
(a)

Rules of construction
Nothing in this Act shall be construed to—
(1)
authorize the Federal Government to seize, confiscate, or otherwise impair any property right in the lawfully acquired Bitcoin holdings of any person; or
(2)
infringe upon the rights of individuals, businesses, or organizations to purchase, hold, transfer, or dispose of Bitcoin in accordance with the law.
(b)

Affirmation of rights
This Act affirms and protects the rights of persons to maintain full lawful control over the Bitcoin and other digital assets of those individuals, recognizing that the ability to maintain self-custody of private keys is fundamental to the principles of financial sovereignty, privacy, and personal liberty in the digital age.