Senator Cynthia Lummis Proposes Bitcoin Reserve Bill as National Debt Hits New High

Key Points:

• Senator Cynthia Lummis proposes a Bitcoin reserve to back the U.S. dollar and address the nation’s $35 trillion national debt.
• Under the plan, the U.S. Treasury would purchase one million bitcoins over five years and hold them for at least 20 years.
• The plan has received scepticism, but it is only part of a larger debate going on about Bitcoin’s role in economic policy.

A far-reaching bill has been presented by Wyoming Senator Cynthia Lummis to finally deal with the U.S. national debt, now standing at $35 trillion.

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

Senator Cynthia Lummis Unveils Bitcoin Reserve to Fight National Debt

The legislation was revealed on Wednesday at the Bitcoin 2024 event in Washington, D.C., to create a reserve backing the U.S. dollar with Bitcoin, now under greater and increasing fiscal pressures.

This new legislation would mean adding Bitcoin to the balance sheet of the Federal Reserve as a strategic reserve asset. The Bitcoin buying program over five years, similar to the strategic petroleum reserve, will likely be led by the U.S. Treasury. According to Lummis, this will further stabilize and solidify the dollar across the world and might also permanently alter the course of the economy.

Wyoming Senator Cynthia Lummis said the role of Bitcoin would be somewhat akin to a strategic reserve aimed at shoring up the dollar and fending off inflation. The government would hold this bitcoin – the way it does gold at various secure locations – and would use it to pay down debt but would hold each Bitcoin dormant for no fewer than 20 years.

Skepticism Surrounds Bitcoin Reserve Plan Amid Economic Debate

While Lummis is optimistic about the idea, critics, including analysts at the Cato Institute, have raised doubt both at the idea and at the implication of the same. The plan would require buying one million bitcoins at $100 billion, about 5% of all available circulating Bitcoins.

It joins broader discussions about what role Bitcoin could play in U.S. economic policy, following similar proposals by people like former President Donald Trump and independent candidate Robert F. Kennedy Jr., who have also called for large Bitcoin reserves.

Though she says it’s unlikely her bill will make its way out of committee before the 2024 elections, with growing interest in Bitcoin reserves, she is optimistic about a tectonic shift in economic strategy—strong recognition of the ever-growing importance of Bitcoin within the political and economic debate.