As Bitcoin gains popularity within the Republican Party, particularly championed by former President Donald Trump, lawmakers are increasingly positioning the cryptocurrency as a cornerstone for U.S. economic growth.
US Senator Cynthia Lummis is at the forefront of this movement, advocating the Bitcoin Act, which aims to establish a strategic Bitcoin reserve for the United States.
A bold solution to the budget crisis
In a recent one interview Together with Bankless, Lummis articulated her views on the Bitcoin Act, highlighting its potential to address the country’s staggering $35 trillion debt burden, which she said offers no viable solutions under current fiscal policies. Lummis believes that creating a Bitcoin reserve is the only rational approach to managing this debt crisis.
The proposed mechanism for the Bitcoin reserve would involve the US government reallocating gold certificates, which are currently valued at their historical 1917 rates, to their current market value of approximately $2,400.
The senator plans to use the difference to purchase BTC over five years, with the goal of acquiring more than one million BTC – about 5% of the total supply – and storing it safely in a refrigerator for 20 years. Lummis claims this strategy could effectively halve the national debt by 2045.
Lummis emphasized that this approach further allows the government to invest in Bitcoin without impacting the U.S. balance sheet or accumulating additional debt. She sees Bitcoin as a solution she has been searching for throughout her career, arguing that its characteristics as a non-government-issued asset make it a more reliable backer for fiat currencies compared to traditional stocks or other fiat currencies.
Global ‘arms race’ for Bitcoin?
Addressing concerns about the devaluation of the US dollar, especially during the COVID-19 pandemic when unprecedented amounts of US dollars were printed, Lummis highlighted the scarcity of BTC as a key differentiator. She described it as a true diversifier that does not suffer from the same inflationary pressures as fiat currency.
In a thought-provoking statement, Lummis suggested that the future could see an “arms race,” not for arms dominance, but for Bitcoin as a secure store of value. She noted that countries like the US, China and Russia are increasingly competing with each other to establish themselves as leaders in crypto.
Following her comments at the 2024 Bitcoin Conference, there has been a notable increase in letters urging support for the Bitcoin Act. The legislation has now been referred to the Senate Banking, Housing and Urban Affairs Committee for further consideration.
This push for a Bitcoin reserve aligns with Trump’s vision to position the United States as the “crypto capital of the planet.” The former president did that stressed the importance of maintaining robust Bitcoin and cryptocurrency reserves, warning that ignoring this opportunity could give countries like China the upper hand in the global financial landscape.
Trump has reiterated Bitcoin’s potential as a modern currency, citing expressions of support from individuals within his circle and urging the government to recognize its benefits.
At the time of writing, the largest cryptocurrency on the market is trading at $58,000.
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