US Senator Comments on the Fed Holding Bitcoin: Is BTC Reserve Coming?

US Senator Cynthia Lummis called on Congress to give the Fed the authority to hold Bitcoin as part of a strategic reserve to strengthen the US dollar and address the country's growing debt.

Recently, in an interview, Lummis summarized her vision of a federal Bitcoin reserve, emphasizing its potential to serve as both a protection against inflation and a long-term savings mechanism.

Senator Lummis suggested that the US government should buy 200,000 Bitcoins annually for five years to accumulate a total of one million Bitcoins. This reserve will be held for at least twenty years and could potentially reach a value of 16 trillion dollars.

Lummis said, “I want our federal government to have a strategic Bitcoin reserve that can help support the US dollar as the world's reserve currency and serve as a long-term savings account.” She added, “This could help balance our national debt, which currently exceeds 36 trillion dollars.”

The senator suggested that purchases could be financed with existing assets already owned by the federal government. In addition, Lummis proposed consolidating these assets in the reserve, stating that approximately 200,000 bitcoins currently held by the state were disposed of through confiscation of assets.

Despite Bitcoin's relative volatility and 15-year history, Lummis believes it is the right asset for this business. Describing Bitcoin as "digital gold," Lummis highlighted its limited supply of 21 million coins and its historically rising value.

Lummis said, “In the long term, Bitcoin's growth has far outpaced the ability of the US dollar to keep up” and added, “While the US dollar is designed to lose value with a 2% inflation target, Bitcoin is designed to gain value and provides a hedge against inflation and a stronger asset over time.”

Lummis, while acknowledging the short-term volatility of Bitcoin, argued that its long-term growth potential makes it an important asset for the country's financial strategy.

When asked why such a move had not been considered by the FED earlier, Lummis explained that existing laws did not authorize the FED to hold Bitcoin. "We need to give them this authority," she said.

Lummis also rejected concerns about the volatility of Bitcoin, arguing that Bitcoin's long-term rise balances out short-term fluctuations. She also added that the reserve will provide a strong asset to stabilize the dollar and reduce the national debt burden in the US.