As Bitcoin gains traction within the Republican Party, notably championed by former President Donald Trump, lawmakers are increasingly positioning the cryptocurrency as a cornerstone for US economic growth.
US Senator Cynthia Lummis is at the forefront of this movement, advocating for the Bitcoin Act, which aims to establish a strategic Bitcoin reserve for the United States.
A Bold Solution For Fiscal Crisis
In a recent with Bankless, Lummis articulated her vision for the Bitcoin Act, highlighting its potential to address the nation’s staggering $35 trillion debt, which she argues has 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 involves the US government repurposing gold certificates, which are currently valued at their historical rates from 1917, to their present market value of approximately $2,400.
The senator plans to use the differential to purchase BTC over a five-year period, with a target of acquiring over one million BTC—roughly 5% of the total supply—storing them securely in cold storage for twenty years. Lummis asserts that this strategy could effectively cut in half the national debt by 2045.
Lummis emphasized that this approach further allows the government to invest in Bitcoin without impacting the US balance sheet or accruing additional debt. She views Bitcoin as a solution she has sought throughout her career, arguing that its characteristics as a non-government-issued asset make it a more reliable backing 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, particularly during the COVID-19 pandemic when unprecedented amounts of US dollars were printed, Lummis highlighted BTC’s scarcity as a key differentiator. She described it as a true diversifier that does not suffer from the same inflationary pressures as fiat currencies.
In a thought-provoking statement, Lummis suggested that the future may see an “arms race” not for weapon dominance, but for Bitcoin as a secure store of value. She noted that countries like the US, China, and Russia are increasingly competing to establish themselves as leaders in crypto.
Following her remarks at the 2024 Bitcoin Conference, there has been a notable increase in constituent letters urging support for the Bitcoin Act. The legislation has now been referred to the Senate Committee on Banking, Housing, and Urban Affairs 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 has the importance of maintaining robust Bitcoin and cryptocurrency reserves, warning that neglecting this opportunity could allow nations like China to gain an upper hand in the global financial landscape.
Trump has reiterated Bitcoin’s potential as a modern currency, citing endorsements from individuals within his circle and urging the government to recognize its benefits.
At the time of writing, the largest cryptocurrency on the market trades at $58,000.
Featured image from DALL-E, chart from TradingView.com