US Senator Cynthia Lummis of Wyoming is doubling down on her efforts to legalize Bitcoin and potentially add this digital asset to the country’s reserves.
In an interview on November 21, Loomis suggested that the US Federal Reserve sell some of its gold reserves to invest in gold. encryption. The Wyoming senator noted that proceeds from selling part of gold reserves, estimated at 1970 prices, could strengthen the US dollar and reduce the country’s mounting debt.
Lummis’ announcement comes as BTC has reached an all-time high and is approaching the $100,000 mark. By pursuing a Bitcoin policy, the Fed can also benefit from higher yields.
Bitcoin is a “gold standard in digital assets, creating a strategic reserve that can help the country’s financial strategy.
Loomis says Bitcoin reserves could strengthen the US dollar and reduce debt
Lummis is one of the most vocal supporters of Bitcoin and cryptocurrencies, and has pushed for it Bitcoin invoice In the Senate. As a long-time cryptocurrency holder and supporter, the senator admitted to owning five bitcoins and placing them in a trust.
The government could adopt this strategy, start a cryptocurrency reserve, and hold these assets for at least two decades, the lawmaker said.
Explained: 🇺🇸 Bitcoin Strategic Reserve
Breaking the Bitcoin Law – Bill Introduced by Senator @CynthiaMLummis
– Buy one million Bitcoin over five years
– HODL for 20 years
– Proof of reserves
– Protect Bitcoin ownership rightsTL;DR: 🚀🚀🚀 pic.twitter.com/snnWP59FBc
– Julian Driver (@Julian__Fahrer) November 19, 2024
Loomis admitted that she met with incoming US President Donald Trump about the Bitcoin proposal. Under the latest Loomis planGold certificates held at dozens of Federal Reserve banks can be converted to their current fair market value. Proceeds from the sale of the certificates, linked to 1970s prices, can be used to buy Bitcoin.
A look at the proposed US Bitcoin reserve
The planned strategic Bitcoin fund combines some long-term investment phases carried out over several years. The Treasury Department is purchasing 200,000 bitcoins annually under the 2024 Bitcoin Act for five years while holding the digital assets for at least 20 years.
BTCUSD trading at $97,500 on the daily chart: TradingView.com
To ensure fairness and transparency, the government must implement a reserve proof system, where the government will publish audited quarterly reports. If other agencies have Bitcoin holdings, they will be incorporated into the proposed strategic reserve.
There is also a provision to use the reserved BTC as a secure financial mechanism that will enable agencies to use BTC as a long-term asset. Furthermore, the government will create a decentralized storage network that can protect assets from vulnerabilities and risks.
Image: Reddit
Some critics question Loomis’ plan
Like most fiscal policies, the Loomis plan has its critics. According to Avik Roy of the Foundation for Equal Opportunity Research (FREOPP), Loomis’ proposal to create a Bitcoin reserve will not necessarily help the country solve its debt problems.
In a speech at the North American Blockchain Summit 2024, Roy said Loomis’ plan cannot cover the growing debt, which now stands at $35 trillion.
Roy shared that a Bitcoin reserve would be a welcome move, but the government still has to implement budget reports to address the $2 trillion annual deficit. He also raised the possibility that the country could give up its Bitcoin reserves in the future, similar to the gold experience in the 1970s.
Featured image from ZeroCap, chart from TradingView