Senator Lummis proposes a U.S. Bitcoin reserve to back the dollar and reduce debt.
The plan includes acquiring 1M Bitcoin over five years, projecting $16T in 20 years.
Lummis defends Bitcoin as “digital gold,” citing long-term growth and finite supply.
U.S. Senator Cynthia Lummis has responded to Federal Reserve Chairman Jerome Powell’s stance on Bitcoin ownership. She discussed a proposal for a national Bitcoin reserve strategy that could help address America’s growing national debt and strengthen the U.S. dollar’s position as the world’s reserve currency.
In a recent interview with Yahoo Finance, Lummis addressed Powell’s statement about the Federal Reserve’s inability to own Bitcoin. She emphasized that this limitation is purely a matter of current legal authority rather than a fundamental obstacle. “I want to give it to them,” Lummis stated, proposing legislation that would allow the federal government to establish a strategic Bitcoin reserve.
The national debt grows every day thanks to Washington’s spending addiction. My strategic bitcoin reserve constructs a resilient financial system to eliminate the debt. We need the #BITCOINAct ! https://t.co/nQtI4RuQ6F
— Senator Cynthia Lummis (@SenLummis) December 19, 2024
The senator’s plan involves a systematic acquisition strategy: purchasing 200,000 Bitcoin annually over five years, accumulating a total of one million Bitcoin. This reserve would be held for a minimum of 20 years, with projections suggesting it could grow to a value of approximately $16 trillion.
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Lummis explained that the proposal serves dual purposes. First, it would strengthen the U.S. dollar by backing it with a hard asset, addressing concerns about fiat currency debasement. Second, it would help offset the burden of the national debt, which currently exceeds $36 trillion.
The senator also addressed questions about the existing government-held Bitcoin, approximately 200,000 coins currently in the asset forfeiture fund. She proposed transferring these assets into the strategic reserve as a foundation for the larger accumulation strategy.
When questioned about Bitcoin’s suitability as a reserve asset given its relatively short 15-year history and price volatility, Lummis defended the cryptocurrency’s fundamental characteristics. “It absolutely is the right asset,” she stated, describing Bitcoin as “digital gold” with a finite supply of 21 million coins.
The senator acknowledged Bitcoin’s price volatility but emphasized its long-term growth trajectory. She noted an average annual appreciation of about 55% since inception. Lummis explained that while this growth rate might gradually decrease to 45% or 35% annually, it would continue to outpace the U.S. dollar’s intentional 2% annual inflation target.
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