Fed Considers Gold Profits to Fund Bitcoin Reserve

• Fed evaluates funding Bitcoin reserve via gold gains
• Senator Lummis backs a Strategic Bitcoin Reserve
• Proposal ties U.S. gold profits to digital asset security

In a surprising shift, the Federal Reserve has released a report evaluating a proposal to use profits from gold valuation gains to establish a US Strategic Bitcoin Reserve. The idea, originally championed by pro-crypto Senator Cynthia Lummis, would effectively tie a portion of the nation’s financial reserves to Bitcoin—using gold as the funding source.

The Fed’s exploration signals a growing openness to alternative reserves beyond traditional fiat and precious metals. With gold prices near all-time highs, the valuation gains on the U.S. Treasury’s gold holdings have become significant. Rather than selling the gold itself, the plan proposes to leverage the valuation gains—the difference between the book value and the current market value—as a funding mechanism.

Lummis’s Vision for a Bitcoin-Backed Future

Senator Lummis, known for her strong pro-Bitcoin stance, has consistently advocated for integrating Bitcoin into U.S. monetary strategy. Her proposal envisions a U.S. Strategic Bitcoin Reserve that functions similarly to the Strategic Petroleum Reserve—providing financial stability and geopolitical leverage in times of economic uncertainty.

The Fed’s report doesn’t endorse the proposal but lays out legal, economic, and logistical considerations. It notes potential benefits, such as hedging against fiat depreciation, alongside concerns about volatility and regulatory clarity.

What This Could Mean for U.S. Monetary Policy

If the U.S. were to establish a Bitcoin reserve, it would mark a major shift in how the government approaches digital assets. Such a move could signal confidence in Bitcoin’s long-term value and potentially influence other countries to follow suit. It also raises questions about how this might affect U.S. monetary policy, market dynamics, and international trust in dollar-based reserves.

While still in the discussion phase, this proposal indicates a serious conversation is underway at the highest levels about integrating Bitcoin into national financial strategy—using one of the oldest stores of value, gold, to fund one of the newest.

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