Why the US Needs 1 Million Bitcoin: Senator Lummis Explains

Senator Cynthia Lummis (R-WY) has introduced the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. This bill seeks to establish a Bitcoin reserve, reflecting strategies typically used for commodities like oil and gold.

The BITCOIN Act proposes a decentralized network of secure Bitcoin vaults under the US Department of Treasury’s oversight. It aims to ensure top-tier physical and cybersecurity for the nation’s Bitcoin assets.

Bitcoin Price Drops Despite Lummis’ Proposal

The legislation calls for a program to acquire 1 million Bitcoin units, representing about 5% of the global supply. This strategy mirrors the US approach to gold reserves.

Funding for this ambitious project would come from reallocating existing Federal Reserve System and Treasury Department resources. Furthermore, the bill emphasizes the self-custody rights of private Bitcoin holders, ensuring that the strategic reserve does not impinge on individual financial freedoms.

Read more: Who Owns the Most Bitcoin in 2024?

Senator Lummis highlighted the urgency of her proposal amid economic pressures such as rising inflation and soaring national debt.

“Bitcoin is transforming not only our country but the world and becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation,” Lummis stated.

However, despite the US senator’s endorsement, the price of Bitcoin has not risen. As of this writing, it is trading at $64,462, down by around 2.97% in the past 24 hours.

Lummis first announced her proposal for a Bitcoin strategic reserve at the Nashville Bitcoin Conference. According to Lummis, this initiative could position the US as a leader in financial innovation.

However, the plan has its critics. Some argue that Lummis is just pandering to voters.

Others believe the $70 billion investment in Bitcoin is insufficient compared to the $34 trillion US debt and may not provide significant strategic value. Paul Vigna, a well-known author, expressed doubts about the bill’s effectiveness.

“I hate to be that guy, but this makes no sense. $70 billion of bitcoin won’t help a $34 trillion debt. Bitcoin is not strategically important. It just isn’t. It’s a fascinating experiment in finance, but it’s not critical in any way to global markets. There is no good reason to do this,” Vigna remarked.

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Despite these criticisms, the introduction of the BITCOIN Act is a landmark event in US legislative history. It represents a bold step toward integrating digital assets into national financial strategies.

As the bill progresses through the legislative process, it will likely ignite extensive debate among policymakers and economic experts, highlighting varied perspectives on the role of Bitcoin in government finance strategies.