Emily Walker
During a recent discussion with Yahoo Finance, Senator Cynthia Lummis from Wyoming presented a plan aimed at allowing the Federal Reserve to include Bitcoin in the official reserves of the United States. She believes this could enhance the nation’s financial stability over time, bolster the US dollar’s global status, and act as a safeguard against the growing federal debt, which exceeds $36 trillion.
Proposal for Bitcoin Ownership
Lummis outlined her strategy, stating, “We would acquire 200,000 BTC annually for five years, summing up to a million BTC, using other existing assets. This Bitcoin would be held for at least two decades, likely accruing a fund estimated to be worth approximately $16 trillion. Our objective is to create a Strategic Bitcoin Reserve (SBR) to support the US dollar and function as a long-term savings mechanism, helping to mitigate our national debt.”
These comments challenge the position of Federal Reserve Chair Jerome Powell, who recently affirmed that the Federal Reserve Act prohibits the ownership of Bitcoin. At the latest Federal Open Market Committee meeting, Powell stated, “We’re not allowed to hold Bitcoin. The law defines what we can own and we’re not seeking a change in that.”
Despite recognizing this legal limitation, Lummis remained resolute about pushing for legislative changes. She expressed, “I understand that the Federal Reserve feels it doesn’t have the legal authority to possess Bitcoin. However, it’s essential for Congress to provide that authority. The US already holds about 200,000 Bitcoin, which is part of the asset forfeiture fund. I believe we should transfer these assets into a strategic Bitcoin reserve and add to it.”
This initiative aligns with the objectives outlined in the Bitcoin Act of 2024, which was introduced this year. The Act proposes the establishment of a SBR designed to strengthen the US’s financial position. It includes plans for secure Bitcoin storage and the acquisition of 1 million Bitcoin over five years, funded by existing financial resources without imposing new obligations on taxpayers.
Lummis emphasized Bitcoin’s attributes, stating, “It truly is the right asset. It resembles digital gold, being a finite resource with only 21 million BTC ever to be created. While it can exhibit volatility, its overall trend is upward. Holding it for 20 years acknowledges temporary fluctuations but recognizes the potential for significant long-term growth that outpaces the US dollar.”
To support her views, Lummis referred to historical growth patterns of Bitcoin, noting its relatively short existence of 15 years but highlighting its strong growth trajectory. Although she anticipates a potential decline in annual growth rates—from 55% to around 35%—she believes Bitcoin will continue to appreciate in value, contrasting this with the projected decline of the US dollar’s purchasing power due to inflationary policies.
Senator Lummis aims to enable the Federal Reserve to own Bitcoin.
“I want our federal government to create a Strategic Bitcoin Reserve—acquiring 200,000 $BTC annually for 5 years and holding it for 20 years.” pic.twitter.com/g0nVZWKtK7
— Bitcoin Archive (@BTC_Archive) December 19, 2024
As of now, Bitcoin is being traded at a price of $95,324.
