United States Senator Cynthia Lummis has introduced a proposal for the US government to purchase 5% of the global Bitcoin supply. Speaking at the Bitcoin 2024 Conference in Nashville on July 27, Lummis emphasized that holding Bitcoin could serve as a strategic reserve to mitigate national debt. The plan envisions the government acquiring one million Bitcoin over the next five years, which would cost around $67.4 billion at current market prices.
Implementation Timeline
Lummis outlined that the Bitcoin reserve would start with 210,000 Bitcoins and be stored in various vaults across the country. The government would transition from holding US dollars and other depreciating assets to owning Bitcoin, which is expected to appreciate in value over time.
Support and Opposition
The proposal received enthusiastic support from conference attendees, who praised it as a significant step forward. Lummis’ announcement followed a speech by former President Donald Trump, who pledged to establish the US as a global leader in cryptocurrency if re-elected.
A few days before the conference, Lummis released a report opposing the Biden administration’s proposed 30% tax on energy used by Bitcoin miners, arguing that it would harm the country’s energy infrastructure. This report was titled “Halting Progress: Why the Bitcoin Mining Tax Harms America?” and highlighted the potential benefits of crypto mining for the US energy grid.
Concrete Inferences
– The Bitcoin acquisition could potentially strengthen the US financial position by holding an appreciating asset.
– The move could position the US as a leading nation in the global cryptocurrency landscape.
– The strategy indicates significant political backing for cryptocurrency within certain government sectors.
The proposal suggests a turning point in how the US government might approach digital assets, reflecting a growing recognition of their potential economic benefits.