- Lummis proposes a Bitcoin reserve to offset the US’s $36 trillion debt.
- Senator suggests buying 1 million Bitcoin over five years for long-term growth.
- Legal changes needed for the Federal Reserve to hold Bitcoin as part of reserves.
Senator Cynthia Lummis (R-WY) is advocating for a bold new approach to address the United States’ growing national debt by proposing the establishment of a strategic Bitcoin reserve.
Lummis believes Bitcoin could play a role in strengthening the US dollar as the world’s reserve currency while providing a long-term savings solution. Her proposal is aimed at helping to offset the country’s staggering $36 trillion national debt.
In an interview with Yahoo Finance, Senator Lummis outlined her vision for the Federal Reserve to own Bitcoin as part of its strategic financial reserves.
Lummis proposes that the US government should purchase 200,000 Bitcoin each year for five years, accumulating a total of one million Bitcoin over that period.
According to her projections, holding this amount of Bitcoin for at least 20 years could result in a fund worth approximately $16 trillion.
“I want our federal government to have a strategic Bitcoin reserve,” Lummis said, emphasizing Bitcoin’s potential to act as a long-term savings account.
By securing Bitcoin as part of its financial portfolio, Lummis argues that the government could significantly offset the national deficit and reinforce the value of the US dollar globally.
Currently, the Federal Reserve does not possess the legal authority to own Bitcoin. Lummis pointed out that Federal Reserve Chair Jerome Powell has indicated the central bank’s reluctance to move forward with Bitcoin ownership due to legal limitations.
According to Lummis, the proposal would involve using assets already held by the US government to fund the purchase of Bitcoin.
The senator’s vision includes a long-term commitment, suggesting that the purchases would occur over several years and the holdings would remain untouched for at least two decades to allow for significant growth.
Lummis’ proposal comes at a time when the US government is exploring innovative ways to manage its mounting debt. With Bitcoin’s potential for long-term appreciation, Lummis believes the crypto could provide a sustainable financial strategy that aligns with the country’s need to address its economic challenges.
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