The plan proposed by U.S. Senator Cynthia Lummis to fund Bitcoin purchases partially relies on the vast gold legacy owned by the United States—these gold reserves were left over from the time when the dollar was pegged to precious metals, and dollar holders could exchange gold at a fixed price. Although the dollar has not been convertible to gold since the early 1970s, the Treasury and the Federal Reserve still hold about 8,100 metric tons of gold. The government values this gold at $42 per ounce, far below the current market price of $2,650.
Cynthia Lummis hopes that the Treasury can reassess these gold reserves at current market prices and use the paper profits to fund Bitcoin purchases without raising taxes or issuing new bonds. However, critics point out that this operation is not a free lunch; it would require the Federal Reserve to cover the difference between the Treasury's held gold certificates and the new valuation through a combination of money printing and asset sales.
Monetary economist George Selgin argues that this operation amounts to a government 'backdoor loan' to avoid new debt, bypass regular appropriation processes, and conceal the truth. The Lummis bill relies heavily on gilded magic; George Selgin said, 'What better way to win public support than to make people believe this plan won't cost a dime?' (Jin Shi)