The U.S. government adds $1 trillion to its national debt roughly every 100 days, sparking concerns about runaway inflation. In response, U.S. presidential candidate Donald Trump recently proposed using Bitcoin or “crypto checks” to pay off the U.S. government’s $35 trillion national debt and avoid an imminent debt crisis.
The former president hinted at the role Bitcoin could play in settling the U.S. national debt: “Who knows, maybe we’ll pay off the $35 trillion [of the national debt], give them a little crypto check, right? We’ll give them a little bit of Bitcoin and wipe out our $35 trillion.”
Trump’s explicit support for the government’s use of BTC to deal with the debt crisis is reminiscent of a new bill introduced by U.S. Senator Cynthia Lummis (a Republican from Wyoming, known for her pro-Bitcoin policy stance) – the BITCOIN Act of 2024, which proposes that the United States invest in Bitcoin to repay long-term debt.
1. Bitcoin purchasing plan
This bill establishes a five-year "Bitcoin Purchase Program" to purchase no more than 200,000 Bitcoins per year, totaling one million Bitcoins, or approximately 5% of the total Bitcoin supply. This purchase will be conducted transparently and strategically to minimize potential impact on the market.
2. Establishment of safe storage facilities
To ensure the safe storage of Bitcoin, the bill requires the construction of a decentralized Bitcoin security storage facility network, which will be led by the U.S. Treasury Department and widely deployed across the country to enhance the security and resilience of reserve assets. Each storage facility will adopt the most advanced physical and digital security measures to effectively prevent unauthorized access and attacks to ensure the safety of Bitcoin reserves.
3. Source of funds for purchase
The bill proposes to use the existing Federal Reserve System and Treasury funds to implement the Bitcoin purchase plan. Specific measures include re-evaluating the value of gold certificates held by the Federal Reserve to reflect the current market gold price, and using the resulting difference to purchase Bitcoin. At the same time, the plan also considers reducing the Federal Reserve Bank's free surplus and allocating part of the saved funds to the Bitcoin purchase plan.
4. Holding period and usage rules
According to the bill, the bitcoins purchased by the government will be held for at least twenty years. During this period, it is prohibited to sell, exchange or auction these bitcoins unless they are used to repay national debts. After the initial holding period, the government can sell no more than 10% of the total reserve of bitcoins each year within two years. This provision is intended to ensure that the US government holds sufficient bitcoins in the next twenty years as an important part of the country's long-term financial hedging strategy.
5. Fight economic uncertainty and monetary instability
By incorporating Bitcoin into the national asset reserve system, this bill aims to provide the United States with an effective means to deal with economic uncertainty and monetary instability. As a decentralized digital asset with a limited supply, Bitcoin has unique anti-inflation and risk-avoidance functions. Holding Bitcoin can not only enhance the country's financial resilience, but also help the United States maintain its leading position in global financial innovation and ensure that the country occupies a favorable position in future economic competition.
Through the above measures, the United States Bitcoin Strategic Reserve Act seeks to provide the United States with new financial security in the digital economy era and promote the modernization and diversification of the national financial system. The core goal of the bill is to enhance the financial security and leadership of the United States by establishing a national Bitcoin reserve. By incorporating Bitcoin into the national asset reserve, it is expected to provide the United States with a tool to combat economic uncertainty and monetary instability and enhance the country's financial resilience.
The news that Bitcoin is included in the national strategic reserve has undoubtedly boosted the cryptocurrency market. However, industry analysts cautiously pointed out that if Trump successfully takes office in January next year, he may formulate a "rough plan" to make Lummis' bill a reality, which echoes many contradictions in Trump's "Make America Great Again" slogan and conflicts with the core concept advocated by cryptocurrency.
Bitcoin has long represented "freedom, sovereignty, and independence from government coercion and control", but incorporating Bitcoin into strategic reserves contradicts getting rid of government control. Trump's proposal is not aimed at weakening government regulation, but rather expects that the production of Bitcoin in the future will be completely under the control of the United States. This vision undoubtedly restricts the principle of freedom.
If cryptocurrencies are truly investment vehicles that are independent of political influence, then they should be able to circulate and trade freely without government interference. This view is significantly different from Trump’s idea of Bitcoin and deserves further consideration and discussion.
In general, the proposals of Trump and Lummis have triggered extensive discussions on the potential role of digital assets in the future national financial sector. As to whether this innovative path can eventually become an effective strategy to resolve the national debt crisis, or a risky attempt full of uncertainty, it still needs time and practice to further verify.
