Sen. Cynthia Lummis (R-Wyo.) said in a Wednesday podcast that the U.S. acquiring more than 5% of Bitcoin’s (CRYPTO: BTC) supply as a strategic reserve could “erase” the country’s ballooning national debt.
Is Bitcoin The Key To Improving US Fiscal Health?
In a conversation with Bitcoin Magazine host Spencer Nichols, Lummis stated that acquiring just 5% of Bitcoin’s total supply— roughly 1 million BTC—and holding it for 20 years could reduce the national debt, currently over $39 trillion, by one-third to one-half.
“And if we held even more than 5% of the world’s Bitcoin, it could actually erase our debt. So this is an important asset in a buy-and-hold strategy,” the cryptocurrency-friendly lawmaker added.
The BITCOIN Act
Lummis has long advocated for the passage of BITCOIN Act, a bill proposing the acquisition of 1 million BTC over five years, leveraging budget-neutral strategies such as Federal Reserve remittances and gold certificate revaluations.
The Republican was not optimistic about the bill’s chances in the Senate, but expressed hope that the House version, introduced by Nick Begich (R-AK), would pass.
The U.S. government holds 328,352 BTC, worth approximately $20.29 billion, according to on-chain analytics firm Arkham, with the majority seized from criminal and civil forfeiture proceedings.
While Bitcoin advocates argue that rotating capital from gold to Bitcoin could generate exponential long-term returns for BTC, critics warn that selling over 8,000 tonnes of U.S. gold reserves could depress global gold prices and damage the credibility of U.S. reserves.
Critics have also highlighted Bitcoin’s volatility as a major concern, noting that it can drive prices higher during accumulation phases while increasing the risk of sharp reversals afterward.
After all, the cryptocurrency has collapsed nearly 52% from its record highs of $126,198.07 set in October last year.
‘Innovation Doesn’t Wait For Regulatory Clarity’
Lummis also weighed in on the importance of regulatory clarity for cryptocurrency, warning that without it, innovation could shift away from the U.S.
“I refuse to let that keep happening on my watch,” she added.
Lummis said earlier that the Senate is preparing to move forward with cryptocurrency market structure legislation, also called the Clarity Act, in July, and pushed back against criticism from traditional finance luminaries, including JPMorgan Chase CEO Jamie Dimon.
Price Action: At the time of writing, BTC was exchanging hands at $60,726.20, down 2.92% in the last 24 hours, according to data from Benzinga Pro.
Photo: Memory Stockphoto / Shutterstock
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