US Senator Proposes Strategic Bitcoin Reserve to Strengthen the US Dollar

Senator Cynthia Lummis has outlined a plan to grant the Federal Reserve the authority to purchase and hold Bitcoin as a key asset in the country’s financial strategy. The proposal aims to integrate Bitcoin into the US financial system, providing a strategic reserve that could help back the US dollar.

Legislative Proposal

Lummis’ plan involves the US government purchasing 200,000 Bitcoin annually over five years, totaling one million Bitcoin, and holding it for at least 20 years. According to her projections, this reserve could grow to a value of $16 trillion over time. Federal Reserve Chairman Jerome Powell has stated that the institution currently lacks the legal authority to own Bitcoin.

“I want to give it to them,” Lummis said. “I want our federal government to have a strategic Bitcoin reserve that can help back the US dollar.”

Benefits of the Reserve

The proposed Bitcoin reserve is expected to provide several benefits, including:

  • Strengthening the US dollar
  • Mitigating the challenges posed by the nation’s significant debt

The proposal also suggests transferring approximately 200,000 Bitcoin from the US Asset Forfeiture Fund – seized during law enforcement operations – into the reserve.

Long-Term Value Growth

Despite Bitcoin’s volatility, Lummis views it as an ideal strategic asset, likening it to digital gold. “It is a finite source – only 21 million Bitcoin will ever be mined,” she said, underscoring its scarcity and potential for long-term value growth.

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