On August 1, 2025, the Federal Reserve published a FEDS Note titled “Official Reserve Revaluations: The International Experience,” examining how governments have unlocked unrealized gains on gold and foreign-exchange reserves to finance spending without issuing new debt or raising taxes. The report’s spotlight on recent U.S. legislative proposals—especially Senator Cynthia Lummis’s BITCOIN Act—signals growing interest in pairing traditional reserve assets with digital currencies.
- The U.S. Treasury holds 261.5 million troy ounces of gold, valued by law at $42.22 per ounce but trading near $3 300 per ounce. That gap implies an unrealized gain of nearly $750 billion.
- Five other countries (including Germany and South Africa) have booked revaluation proceeds to cover budget shortfalls or retire debt.
- Revaluing U.S. gold at market prices could fund roughly 3 percent of GDP without altering the physical gold stockpile or expanding the monetary base.
Inside the BITCOIN Act
Senator Cynthia Lummis introduced the Bitcoin Incentive and Transparency for Crypto Innovation (BITCOIN) Act (S. 4912) on July 31, 2024. She proposes channeling revaluation proceeds into a new U.S. Strategic Bitcoin Reserve that would operate much like the Strategic Petroleum Reserve.
- The bill directs the Treasury to purchase 1 million BTC over five years—200 000 BTC per year.
- It would draw on Federal Reserve surplus remittances and gains from revaluing U.S. gold holdings at current market prices.
- The acquired bitcoins must remain in reserve for at least 20 years, ensuring long-term strategic deployment.
Reactions and Policy Outlook
Treasury Secretary Scott Bessent dismissed the idea of tapping gold gains to fund bitcoin purchases, warning it could undermine inflation control and central-bank independence. However, some analysts argue a sovereign digital-asset reserve could strengthen America’s balance sheet and cement U.S. leadership in the evolving global monetary system. Critics counter that bitcoin’s price swings and unproven macro-reserve role pose significant risks.
Meanwhile, Senator Lummis’s role as chair of the Senate Banking Subcommittee on Digital Assets underscores Congress’s growing interest in integrating cryptocurrencies into national policy. Industry experts also point to the SEC’s new digital-asset task force as evidence of a shift from enforcement to innovation support.
Although the Fed’s note stays descriptive, its inclusion of digital reserves marks an institutional milestone. As lawmakers debate and international peers consider similar strategies, the idea of a U.S. Strategic Bitcoin Reserve may move from theory toward legislative reality.
