U.S. Senator Cynthia Lummis has announced plans to introduce legislation for a “strategic bitcoin reserve”. The proposal involves the U.S. purchasing 1 million bitcoin (BTC) over a span of five years.
The Wyoming senator, a long-time supporter of bitcoin, believes that this digital asset could be the solution to the country’s debt crisis. “This is our Louisiana purchase moment,” she declared, drawing parallels to the historic land acquisition that doubled the size of the U.S. in the 19th century.
At current market prices, 1 million bitcoin are valued at approximately $68 billion. The proposed legislation stipulates that these bitcoins would be held for at least 20 years.
Senator Lummis argues that bitcoin, which has seen an average annual increase of about 55% over the last four years, is a great store of value. In contrast, the U.S. dollar has been declining in value amidst increasing inflation. “So it would be of value, in my opinion, to have a hard asset that backs the U.S. dollar and that grows in value instead of declines in value,” the Senator added.
The senator, who reportedly bought her first bitcoins in 2013, has been at the forefront of attempts to pass crypto-specific legislation. The issue of cryptocurrency has become particularly prominent this year after former President Donald Trump endorsed the industry.
According to Lummis, the U.S. Treasury would self-custody the bitcoins across a variety of geographic locations. The government would hold these coins for at least 20 years unless they are sold to reduce the debt.
“We know from modeling the numbers and past experience with bitcoin, that it is capable of being an absolute game changer for the mess the United States has gotten itself into with its debt and its deficits,” Senator Lummis concluded. Her proposal, if passed, could mark a significant shift in the U.S. government’s approach to managing national debt and its stance on digital currencies.
