Senator Cynthia Lummis (R-Wyo.) has introduced a proposal that would grant the Federal Reserve the authority to own Bitcoin (CRYPTO: BTC).
What Happened: According to Lummis, this strategic initiative aims to create a "Strategic Bitcoin Reserve," where the U.S. government would purchase 200,000 Bitcoins annually for five years, holding them for at least two decades.
This reserve would serve dual purposes: to back the U.S. dollar, the world's reserve currency, and to offset the national debt, currently over $36 trillion.
Senator Lummis argued for the necessity of this reserve during a recent interview, stating, "I want our federal government to have a strategic Bitcoin reserve that can help back the U.S. dollars, the world reserve currency, and then serve as a long-term savings account, thereby offsetting our national debt."
She emphasized Bitcoin's role as "digital gold," highlighting its finite supply and potential for long-term growth, which she believes would outpace the devaluation of the U.S. dollar over time.
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Why It Matters: President-elect Donald Trump is reportedly considering an executive order to establish a strategic Bitcoin reserve.
This initiative, which would position Bitcoin as a core national asset, follows a period of growing interest in crypto within political circles, highlighted by statements from influential figures like Dennis Porter of the Satoshi Action Fund.
Trump's openness to the concept was evident when he previously pledged to cease federal sales of seized Bitcoin, instead opting to build a "permanent national asset to benefit all Americans."
This statement, made at a summer conference, underscored his understanding of Bitcoin's value, echoing the popular crypto maxim, "Never sell your Bitcoin."
The potential creation of an SBR would mark a pivotal shift in U.S. fiscal policy, potentially integrating Bitcoin into national reserves similar to how gold has been traditionally managed.
The move aims to shore up the U.S. dollar with a digital asset known for its finite supply and increasing value over time.
Porter has been vocal about the initiative's importance.
In a series of social media posts, Porter stated, "We are in a race to SBR," emphasizing the urgency and strategic advantage of having a national Bitcoin reserve.
He further noted that should there be a delay at the federal level, states might take the lead in creating their strategic reserves, pushing for a decentralized approach to Bitcoin holding within the U.S.
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