Senator Lummis Proposes To Sell Fed Gold For Strategic BTC Reserve: Bloomberg
According to a recent Bloomberg report, Senator Cynthia Lammis, Republican of Wyoming, proposed to sell part of the Federal Reserve's gold holdings to create a strategic bitcoin reserve to buy one million bitcoins. The senator, an ally of Donald Trump, has a plan to replenish the president's proposed strategic Bitcoin reserves without increasing the government deficit.
The bill calls for the United States to acquire 1 million bitcoins, which represents about 5% of the known tokens. Cynthia Lammis estimates that it would cost about $90 billion at current prices, but the sum could rise if the market waits for government involvement.
“We have financial assets in the form of gold certificates to convert to Bitcoin,” Lammis said in an interview with Bloomberg. “So the impact on the US balance sheet is very neutral.”
According to the Lummis bill, cryptocurrency will be held for at least 20 years, and the appreciation in its value will help reduce the national debt.
Uphill battles to face
Although the industry hopes this will be the most crypto-friendly Congress ever, some market watchers believe Loomis' bill, which currently has no allies, will face an uphill battle.
“It's still putting government money online, and bitcoin hasn't shown itself to be a particularly stable asset,” said Jennifer J. Schulpe, director of financial regulation research at the Cato Institute's Center for Monetary and Financial Alternatives. She added, “The bill will require senators and members of Congress who don't understand crypto to have a lot of faith in its long-term viability.”
Novogratz Doubts About Creating US Strategic BTC Reserve
Michael Novogratz, CEO of Galaxy Digital, believes that the likelihood of the US setting up a strategic reserve of Bitcoin is low. But, if that happens, Novogratz predicts that price will push to $500,000 as other countries are forced to create similar reserves.
Lummis first unveiled her bill at the Bitcoin 2024 conference after Trump announced his intention to create a government bitcoin reserve. After the much-anticipated Trump victory, the crypto market surged sharply with Bitcoin hitting a new high above $93,000.
Lummis is hopeful that her BITCOIN account will receive support in the next Congress, short of innovation, technology and competitiveness, to grow the BITCOIN account through facilitated investment at the national level. She noted that Trump supports the reserve idea and that his closest advisers include people who understand Bitcoin and its role in our future.
