Senator Cynthia Lummis Proposes $68 Billion Bitcoin Reserve to Combat US Debt

Key Points:

• Senator Cynthia Lummis suggests the U.S. buy 5% of global Bitcoin and hold it for 20 years to address debt and stabilize the dollar.
• $68 billion purchase would span five years, with Bitcoin managed by the Treasury and sold only to reduce debt.
• Lummis is optimistic about some crypto legislation but doubts the Bitcoin reserve bill will pass before the elections.

At the Bitcoin 2024 Conference in Nashville, Senator Cynthia Lummis of Wyoming unveiled a draft bill proposing the creation of a strategic Bitcoin reserve aimed at bolstering the U.S. dollar against inflation and reducing national debt.

Read more: US Senator Cynthia Lummis Says “We are Building A Pro-crypto Army in Congress”

Senator Cynthia Lummis Proposes Bitcoin Reserve to Combat US Debt

The proposal, announced on July 27, calls for the U.S. government to purchase 5% of the world’s Bitcoin supply, approximately one million BTC, and retain it for at least 20 years.

“It can be used for one purpose, to reduce our debt,” Lummis declared during her keynote address. The acquisition, estimated at around $68 billion given Bitcoin’s current price of $68,000, would be executed over five years.

The legislation suggests that the U.S. Treasury would manage these holdings across various locations, only selling the Bitcoin if necessary to address national debt. Lummis likened the proposal to a “Louisiana purchase moment,” and its potential transformative impact on U.S. fiscal policy.

Senator Cynthia Lummis, a long-time Bitcoin advocate who reportedly invested in the cryptocurrency in 2013, has previously proposed similar ideas. In 2022, she suggested diversifying the Federal Reserve’s balance sheet with Bitcoin. She also supports other crypto legislation, including a stablecoin bill co-written with Senator Kirsten Gillibrand.

Future of Bitcoin Reserve Bill Uncertain Before Upcoming Elections

While optimistic about some crypto legislation passing this year, Lummis acknowledged that the Bitcoin reserve bill is unlikely to advance before the upcoming elections. She has also been involved in discussions about Michigan Senator Debbie Stabenow’s crypto bill.

Lummis noted former President Donald Trump‘s influence on the Republican Party’s stance on digital assets, which includes opposition to central bank digital currencies and support for Bitcoin mining. The proposed bill aims to treat Bitcoin similarly to gold in the Fed’s reserves, potentially stabilizing the U.S. monetary system and dollar value.