Why America Needs 1 Million Bitcoins: Senator Lummis Explains

Senator Cynthia Lammis (R-WY) introduced the Fostering Innovation, Technology, and Competitiveness Nationwide through the Affordable Investment (BITCOIN) Act. This account seeks to establish a Bitcoin reserve that mirrors strategies typically used for commodities such as oil and gold.

The BITCOIN Act proposes a decentralized network of secure bitcoin vaults under the supervision of the US Treasury. It aims to ensure a high level of physical and cyber security for the country's Bitcoin assets.

Despite Loomis' proposal, the price of Bitcoin has fallen

The law calls for a program to acquire 1 million bitcoin units, which represents 5 percent of the global supply. This strategy mirrors that of US gold reserves.

Funding for this ambitious project comes from the Federal Reserve System and the Department of the Treasury's reallocation of resources. Additionally, the bill emphasizes the self-preservation rights of individual Bitcoin holders, ensuring that the strategic reserve does not conflict with individual financial freedoms.

Read more: Who will have the most Bitcoins in 2024?

Senator Lummis underscored the urgency of her proposal amid economic pressures such as inflation and rising national debt.

“Bitcoin is changing not only our country, but the world, and being the first developed country to use Bitcoin as a savings technology confirms our position as a world leader in financial innovation,” said Lummis.

However, despite the support of US senators, the price of Bitcoin did not increase. At the time of writing, it was trading at $64,462, down about 2.97% in the last 24 hours.

Lummis first announced her proposal for the Bitcoin Strategic Reserve at the Nashville Bitcoin Conference. According to Lummis, this initiative will position the US as a leader in financial innovation.

However, the plan has its critics. Some argue that Lummis is only thinking of voters.

Others believe that the $70 billion investment in Bitcoin compared to $34 trillion is insufficient and may not provide significant strategic value. Prominent author Paul Vigna has expressed doubts about the bill's effectiveness.

“I hate to be that guy, but this doesn't make any sense. $70 billion in bitcoin will not help with $34 trillion in debt. Bitcoin has no strategic importance. Not only. It's a fascinating experiment in finance, but by no means critical to global markets. There is no good reason to do this,” Vigna said.

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Despite these criticisms, the introduction of the BITCOIN Act was a landmark event in US legislative history. It represents a bold move to integrate digital assets into national financial strategies.

As the bill moves through the legislative process, it will spark a wide-ranging debate among policymakers and economists, reflecting differing views on the role of Bitcoin in government financing strategies.