Senator Cynthia Lummis reignited her push to cement the U.S. as a Bitcoin powerhouse by reintroducing the BITCOIN Act on March 11. The bill, now co-sponsored by five Republican senators, mandates a strategic reserve exceeding 1 million BTC, leveraging diverse acquisition methods and aligning with a recent Trump executive order.
What Is the BITCOIN Act?
The Boosting Innovation, Technology, and Competitiveness through Optimised Investment Nationwide (BITCOIN) Act of 2025 seeks to integrate Bitcoin into federal reserves. Initially proposing annual purchases of 200,000 BTC over five years, the updated bill expands acquisition avenues. Funds will come from repurposed Federal Reserve and Treasury assets, avoiding taxpayer burden. Additionally, it authorises using gold reserve valuations to finance purchases.
Crucially, the reserve will store Bitcoin in decentralised, audited facilities, prioritising transparency. Senator Lummis emphasised the bill’s potential to tackle national debt while securing America’s “competitive edge” during a Bitcoin Policy Institute conference.
Beyond Direct Purchases
Unlike the initial proposal, the revived BITCOIN Act permits reserves exceeding 1 million BTC through non-purchase channels. For example, the U.S. can now acquire Bitcoin via civil forfeitures, criminal seizures, state transfers, or federal agency handovers. States may also contribute holdings to segregated reserve accounts.
Furthermore, the Treasury will manage these assets, mirroring gold reserve protocols. This diversified approach aims to minimise market disruption while maximising long-term growth. “This isn’t just about accumulation; it’s about strategic economic positioning,” Lummis stated.
Lummis Secures Key Republican Backing
The bill gained momentum with co-sponsorships from Senators Jim Justice, Tommy Tuberville, Roger Marshall, Marsha Blackburn, and Bernie Moreno. Senator Justice praised the legislation for codifying President Trump’s 2025 executive order, which established a “Strategic Bitcoin Reserve.”
“This bill bolsters economic security and addresses our national debt,” Justice asserted. Meanwhile, supporters argue federal Bitcoin holdings could rival gold’s role in stabilising the economy.
New Rules for Forked and Airdropped Assets
The updated Bitcoin Act introduces protocols for handling Bitcoin derivatives like forked or airdropped tokens. Previously, all such assets required five-year retention. Now, the Treasury Secretary will evaluate these post-mandatory holding periods, retaining only high-value or “dominant” assets like Bitcoin Cash or Bitcoin Gold.
This shift aims to optimise reserve value without overcrowding storage. Critics, however, warn evaluating volatile forked assets could complicate management.
Aligning With Trump’s Executive Order
Days before the Lummis bill resurfaced, President Trump ordered a “Digital Asset Stockpile” using seized crypto from legal cases. The stockpile allows asset sales, while the parallel Bitcoin Reserve prohibits disposals, relying on budget-neutral growth.
Analysts note synergy between both initiatives, suggesting coordinated efforts to position the U.S. as a crypto leader. “Together, these measures signal federal confidence in Bitcoin’s longevity,” said economist Mark Connors.
Market Risks and Legislative Challenges
Despite momentum, the BITCOIN Act faces hurdles. Accumulating 1 million BTC which is 5% of Bitcoin’s total supply could spike prices short-term but risk volatility if reserves are later sold. Critics also fear centralised control contradicting crypto’s decentralised ethos.
Legislative approval remains uncertain, given Democratic skepticism toward crypto investments. Additionally, Bitcoin’s energy consumption and regulatory gaps may fuel opposition. Still, proponents argue diversification protects against inflation and currency devaluation.
A High-Stakes Bid for Crypto Leadership
The Senator Lummis BITCOIN Act marks a pivotal step toward federal crypto adoption. If passed, the U.S. could emerge as the largest Bitcoin holder, reshaping global finance. However, balancing innovation with fiscal prudence will dictate its success. As debates unfold, the world watches whether America will convert its crypto ambitions into law.
