The U.S. Strategic Bitcoin Reserve will be funded in part by a reappraisal of the Federal Reserve

The new strategic Bitcoin reserve purchase plan proposed by U.S. Senator Cynthia Loomis would be funded in part by revaluing the Federal Reserve's gold.

Loomis, a Republican senator from Wyoming who is known for her pro-Bitcoin policy stance, announced her plans on Saturday at the Bitcoin Nashville Conference. Former US President Donald Trump also gave a speech on blockchain policy at the conference and supported the use of bitcoins seized by the government from criminal cases to create a new strategic national Bitcoin reserve.

The plan, known as the Bitcoin Act of 2024, would put the Treasury secretary in charge of establishing a decentralized network of secure Bitcoin storage facilities, with locations for vaults selected based on a comprehensive risk assessment that prioritises geographic diversity, security and accessibility, according to the draft.

The Treasury secretary will also establish a "Bitcoin Purchase Program" for purchases of up to 200,000 bitcoins per year for a period of five years, for a total of 1 million bitcoins. The bitcoins will be held for at least 20 years and can only be used to pay off federal debt. After that, no more than 10 per cent of assets are sold every two years.

Bitcoin purchases will be funded through several methods, described in the draft as "offsetting the cost of a strategic bitcoin reserve." The plan proposes allocating $6 billion of any net proceeds that the Federal Reserve banks turn over to the Treasury from fiscal years 2025 to 2029. In addition, the Federal Reserve banks' own funds will be reduced to $2.4 billion from the current $6.825 billion under the Federal Reserve Act.