As Senator Lummis pushes for Bitcoin to stabilize the U.S. dollar, Moe Vela warns of the risks. Read on.

During the Bitcoin 2024 conference in Nashville on July 27, US Senator Cynthia Lummis proposed that the U.S. government consider Bitcoin (BTC) as a strategic reserve asset to stabilize the dollar’s value and counter inflation. 

In a follow-up to her initial announcement, on July 31, Senator Lummis officially introduced the Bitcoin Strategic Reserve bill. This legislation aims to direct the U.S. government to establish a reserve fund specifically for Bitcoin, ensuring it is held securely across various geographic locations. 

The plan includes the government purchasing Bitcoin over five years and holding these assets for at least 20 years with the sole purpose of reducing the national debt, which has surpassed $35 trillion as of August 1. Lummis suggests that this reserve can help cut the U.S. national debt by half by 2045.

At the same conference, Donald Trump and independent presidential candidate Robert F. Kennedy Jr. also supported the idea of a U.S. Bitcoin reserve. 

Trump pledged not to sell the government’s Bitcoin holdings, while Kennedy advocated for a more aggressive approach, suggesting the purchase of 500 bitcoins daily until a reserve of 4 million bitcoins is accumulated.