Senator Lummis calls on the U.S. Treasury to convert gold into Bitcoin, creating a strategic reserve fund, rather than spending $90 billion to buy directly.
On November 14, Senator Cynthia Lummis from Wyoming made a noteworthy proposal, calling on the U.S. Treasury to convert a portion of the national gold reserves – currently the largest in the world at over 8,000 tons – into Bitcoin. The goal is to establish a strategic reserve fund to mitigate inflation impact and strengthen the nation's financial capability.
According to Ms. Lummis, instead of directly spending $90 billion to buy Bitcoin, converting existing gold certificates into this cryptocurrency will help the U.S. government avoid significant fluctuations on its balance sheet. In an interview with Bloomberg, she emphasized that this solution is not only a financial strategy but also a stepping stone to seize the long-term opportunities that Bitcoin presents, especially in the context of the U.S. economy facing significant pressure from inflation and public debt.
This proposal is part of the Strategic Bitcoin Reserve Bill initiated by Ms. Lummis in the Senate. According to the bill, the U.S. Treasury will own 5% of the total Bitcoin supply – equivalent to about 1 million BTC – and commit to holding this asset for 20 years. With the current price of Bitcoin, this plan requires an investment of about $90 billion, a significant amount but considered reasonable compared to the potential value Bitcoin could bring.
Ms. Lummis asserts that the Bitcoin reserve fund is not only a measure to counter inflation but also an opportunity for the U.S. to reinforce its leading position in the field of financial technology. She emphasized: “Bitcoin is an outstanding store of value asset, and establishing a reserve fund soon will help America minimize the risks from the depreciation of the USD in the future.”
Ms. Lummis's proposal quickly received agreement from Bitcoin-supporting investors. Anthony Pompliano, a well-known investor, stated that the $90 billion expenditure to buy Bitcoin is modest compared to the growth rate of the U.S. national debt – which has increased by an additional $850 billion in just the last 90 days. He believes that investing in Bitcoin is a strategic opportunity to mitigate long-term financial risks, especially as this asset is increasingly recognized globally.
However, not all opinions are positive. Mike Novogratz, CEO of Galaxy Digital, believes that the likelihood of this proposal being implemented during the tenure of President-elect Donald Trump is low. Nevertheless, he thinks that if the U.S. establishes a Bitcoin reserve fund, the value of this asset could rise sharply, potentially reaching $500,000/BTC.
Ms. Lummis's proposal comes amid other countries taking similar steps to integrate Bitcoin into their national financial systems. El Salvador is the first country to accept Bitcoin as legal tender and has added this asset to its government balance sheet. Bhutan is also implementing initiatives related to Bitcoin mining and the accumulation of cryptocurrency assets.
