Strategic Bitcoin Reserve by 2025, Says Senator Lummis

Senator Cynthia Lummis has doubled down on her efforts to implement a strategic Bitcoin reserve as part of the United States’ fiscal policy. Highlighting the potential of digital assets, Lummis pointed to 2025 as a defining year for cryptocurrencies, particularly with David Sacks appointed as the administration’s “Crypto Czar.”

Lummis believes this new pro-digital asset administration offers a strong opportunity to advance Bitcoin-related legislation.

Lummis Pushes for Strategic Bitcoin Reserve

The Senator has notably pushed to adopt Bitcoin as the Nation’s reserve currency. She proposed the BITCOIN Act in July 2024 whereby the US Treasury should buy 1 million BTC in five years. With this, Wright intends to accumulate around 5% of the total supply to act as a hedge against currency devaluation and increasing national debt.

Lummis argues that Bitcoin’s scarcity and decentralized nature make it a suitable hedge against inflation.

The reserve, she claims, could enable the U.S. to pay down a significant portion of its $35 trillion debt by 2045. Rather than selling gold outright, Lummis suggests converting a portion of U.S. Treasury gold into Bitcoin using gold certificates to avoid impacting the federal balance sheet.

However, establishing the reserve may face political hurdles, even with Republican control of Congress and the Senate. Lummis acknowledges resistance among some GOP members who view Bitcoin as volatile and risky for federal investment.

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David Sacks and Pro-Digital Asset Administration

David Sacks positioning as the ‘Crypto Czar’ has added to the optimism of pro-Bitcoin policies. Sacks was an executive at PayPal and a prominent venture capitalist. He will likely be instrumental in constraining digital currency rules in the new presidency.

Lummis commended Sacks as an advocate of digital assets emphasizing his knowledge and advocacy for change in the financial industry.

Lummis recently met with Sacks, emphasizing their shared goals of promoting fiscal responsibility and advancing digital asset legislation. She reaffirmed her commitment to working closely with him and the administration to integrate Bitcoin into national policy.

The Senator believes that Sacks’ leadership will help navigate regulatory challenges and bolster confidence in Bitcoin’s role as a strategic asset.

The decision has occurred as the previous US President Donald Trump also supported the concept of a national Bitcoin fund, an important change in the federal perception of cryptocurrencies.

When Republicans control both the White House and Capitol Hill, as they currently do, more ambitious initiatives, such as Lummis’ reserve plan, might get a boost.

Challenges and Prospects for the Bitcoin Reserve

Despite growing support, Lummis’ strategic Bitcoin reserve faces significant challenges. Passing legislation to establish a large, permanent reserve would require bipartisan support, which remains unlikely given lingering skepticism about cryptocurrencies. Many Republicans and Democrats alike remain wary of Bitcoin’s volatility and its suitability as a federal asset.

Senator Lummis sees Bitcoin as a vital tool for restoring fiscal responsibility in the United States. She argues that diversifying national reserves with Bitcoin can safeguard the U.S. economy against inflation and currency depreciation. “We are going to build a strategic Bitcoin reserve,” she wrote.

According to Lummis, this policy will position the United States alongside other nations where governments consider bitcoin in their economic policies. Other countries such as El Salvador have already included Bitcoin in their fiscal strategies and Lummis believes that America can also do this on a large scale.