Senator Cynthia Lummis is pushing a pretty radical idea: using some of the US government’s gold reserves to buy Bitcoin. She believes this could boost the dollar and help reduce the national debt.
The Plan: Bitcoin as a National Reserve
Lummis, a known Bitcoin supporter (she even owns some!), wants the US Federal Reserve to sell some of its gold, valued at 1970s prices, and use the money to buy Bitcoin. She sees Bitcoin as a kind of “digital gold,” and thinks a large Bitcoin reserve would be a smart long-term investment strategy.
Her proposed “Bitcoin Act” outlines a five-year plan to buy 200,000 Bitcoins annually, holding them for at least two decades. Transparency is key; the plan includes regular, audited reports to prove the government actually has all those Bitcoins. Any existing government-held Bitcoin would also be added to this new reserve. The goal is to create a secure, decentralized system to protect this digital asset.
The Details of the Bitcoin Act
Here’s a quick rundown of the key points of the Bitcoin Act:
- Buy: Acquire 200,000 Bitcoin per year for five years.
- HODL: Hold onto the Bitcoin for at least 20 years.
- Proof of Reserves: Regularly audited reports to verify Bitcoin holdings.
- Protection:
Secure, decentralized storage to safeguard the assets.
Critics Weigh In
Not everyone’s on board. Some argue that buying Bitcoin won’t magically solve the US’s massive debt problem, which is currently around $35 trillion. They point out that even a substantial Bitcoin reserve wouldn’t cover the annual deficit, and there’s always the risk the government might sell its Bitcoin holdings in the future, just like it did with gold in the 1970s. While acknowledging that a Bitcoin reserve could be beneficial, critics emphasize the need for broader budget reforms to address the underlying debt issues.
