Congress discussing bill to allow Fed to hold Bitcoin: Lummis

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As a seasoned crypto investor with over two decades of experience in the financial markets, I find Senator Cynthia Lummis’ proposal to be both intriguing and potentially groundbreaking. Having witnessed the evolution of digital currencies and their growing acceptance as a viable asset class, I can appreciate the strategic value of integrating Bitcoin into the U.S. financial strategy.

In conversation with Yahoo Finance, Senator Cynthia Lummis proposed a scheme where the Federal Reserve would be allowed to buy and keep Bitcoin, making it a significant element in the nation’s financial planning strategy.

In a recent FOMC meeting, Federal Reserve Chair Jerome Powell expressed that the Fed doesn’t have the legal right to hold Bitcoin (BTC) as an asset. However, Senator Lummis is working on drafting new laws to potentially alter this situation.

She expressed to Yahoo Finance that she intends to propose a plan, which involves the U.S. government acquiring 200,000 Bitcoins every year for five years, accumulating a total of one million Bitcoins. If her predictions are correct, this reserve could potentially increase in value to approximately $16 trillion over a period of time.

As an analyst, I advocate for the establishment of a strategic Bitcoin reserve by our federal government, serving as a backup for the U.S. dollar.

Benefits of the reserve

Senator Lummis highlighted that establishing a Bitcoin reserve could offer various advantages such as fortifying the US dollar and addressing the difficulties arising from the country’s substantial debt. The plan further proposes moving approximately 200,000 Bitcoins from the U.S. Asset Forfeiture Fund (acquired during law enforcement actions) into this reserve.

Regarding Bitcoin’s volatile nature, Senator Lummis considers it an excellent strategic asset, comparing it to digital gold. She emphasizes that Bitcoin is a limited resource, as only 21 million units will ever be mined, thus highlighting its scarcity and potential for long-term value appreciation.

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2024-12-20 00:03