Key Points
- Senator Cynthia Lummis has proposed a bill to sell Federal Reserve gold to buy 1 million Bitcoin.
- The Bitcoin purchase would cost around $90 billion and is intended to help reduce the national debt.
- Lummis claims the plan is neutral for the U.S. balance sheet, as gold certificates can be exchanged for Bitcoin.
- While Trump and some crypto-supportive lawmakers back the idea, the bill faces opposition over Bitcoin’s volatility and its lack of co-sponsors.
- If successful, the plan could drive Bitcoin’s price up and encourage other countries to start similar reserves.
- Lummis is hopeful that a new GOP-majority Congress will support the bill, with increasing backing from crypto-friendly members.
Looma News
Senator Cynthia Lummis, a Republican from Wyoming, has introduced a bill to acquire 1 million Bitcoin by selling part of the U.S. Federal Reserve’s gold reserves. At today’s prices, this purchase would cost around $90 billion and is part of a strategy to reduce the national debt through the potential rise in Bitcoin’s value. Lummis believes the plan would be financially neutral for the U.S. government since gold certificates could be swapped for Bitcoin without affecting the balance sheet.
The bill builds on former President Donald Trump’s proposal to create a government Bitcoin reserve, which would include the roughly 200,000 Bitcoin already seized by U.S. authorities. Lummis expects the cryptocurrency would be held for at least 20 years, during which time its value would increase and help lower the national deficit. However, the proposal faces significant hurdles, as critics question Bitcoin’s stability and whether it can be trusted as a long-term investment.
Some in the crypto community, like billionaire Michael Novogratz, are skeptical about the plan’s chances. Novogratz believes it could push Bitcoin’s price to $500,000, as other countries would likely follow the U.S.’s lead. The proposal comes at a time when Bitcoin prices have hit new record highs. Despite the doubts, Lummis remains confident, noting growing support from crypto-friendly lawmakers and Trump’s endorsement of a Bitcoin reserve.
The bill, called the BITCOIN Act, is set to be introduced in the next Congress. It has already caught the attention of pro-crypto lawmakers, including Bernie Moreno, who recently won a Senate seat after defeating a Democrat. However, market observers are cautious, and the bill currently lacks co-sponsors, which may make it difficult to get approval.
