As Bitcoin gains traction 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, championing the Bitcoin Act, which aims to establish a strategic Bitcoin. reserve to the United States.
A bold solution to the fiscal crisis
In a recent interview With Bankless, Lummis articulated her vision for the Bitcoin Act, highlighting its potential to address the country’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 Bitcoin’s reserve involves the US government redeploying gold certificates, which are currently valued at their historical 1917 rates, to their current market value of approximately $2,400.
The senator intends to use the difference to buy Bitcoin over a five-year period, with the goal of acquiring over one million BTC—about 5% of the total supply—and storing them safely in cold storage for twenty 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 US. balance or accrue additional debt. She sees 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 Bitcoin ‘Arms Race’?
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 shortage 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 dominance in weapons, 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 his remarks at the 2024 Bitcoin Conference, there has been a notable increase in constituent letters calling for 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 is in line with Trump’s vision of positioning the United States as the “crypto capital of the planet.” The former president has stressed the importance of maintaining robust reserves of Bitcoin and cryptocurrencies, warning that neglecting this opportunity could allow nations like China to gain an advantage in the global financial landscape.
Trump reiterated Bitcoin’s potential as a modern currency, citing endorsements from individuals in his circle and urging the government to recognize its benefits.
At the time of writing, the largest cryptocurrency on the market was trading at $58,000.
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