Congress Considers Bill to Allow Fed to Hold Bitcoin, Says Lummis

In a groundbreaking interview with Yahoo Finance, Senator Cynthia Lummis outlined a bold proposal that could reshape the U.S. financial system by allowing the Federal Reserve to purchase and hold Bitcoin. This proposal is part of Lummis’s broader vision to integrate Bitcoin into the country’s financial strategy, potentially as a key reserve asset. The plan would grant the U.S. government the legal authority to hold Bitcoin, something Federal Reserve Chairman Jerome Powell recently acknowledged is not currently possible under the existing laws. Lummis’s plan aims to rectify this and provide a legal framework that empowers the government to include Bitcoin in its long-term financial strategy.

Lummis proposed that the Federal Reserve purchase 200,000 Bitcoin annually over a period of five years, accumulating a total of one million Bitcoin. According to her projections, this reserve could appreciate in value to an astonishing $16 trillion over time. She emphasized that this Bitcoin reserve would not just be a speculative asset but would also play a crucial role in strengthening the U.S. dollar and alleviating the burden of the country’s national debt. In her view, Bitcoin’s scarcity—limited to only 21 million coins—makes it an ideal store of value, similar to gold. She believes that Bitcoin’s fixed supply gives it a unique edge over traditional fiat currencies and that it could help safeguard the U.S. economy against inflationary pressures and financial instability.

The senator’s plan also envisions using part of the Bitcoin reserve to assist with managing the country’s debt. Lummis suggested that the U.S. could transfer around 200,000 Bitcoin from the U.S. Asset Forfeiture Fund—a collection of assets seized by law enforcement during criminal investigations—into the proposed strategic reserve. This approach would make use of seized assets, allowing the U.S. government to not only hold Bitcoin but also boost its financial reserves without directly impacting taxpayer funds.

While Bitcoin is known for its volatility, Lummis argued that its long-term potential outweighs the short-term fluctuations. Drawing comparisons to gold, she stressed Bitcoin’s importance as a finite digital asset with inherent value. The senator is hopeful that Bitcoin could become a cornerstone of future financial stability, arguing that the U.S. government should take a proactive role in securing it for the future, much like it has historically done with gold reserves.

Lummis’s plan has the potential to fundamentally change how governments view Bitcoin, framing it not just as a speculative investment but as a strategic asset with the ability to influence global financial systems. If successful, this legislation could set a precedent for other nations, and may even spark a global movement to integrate Bitcoin into national reserves, changing the dynamics of both the cryptocurrency and traditional financial markets. With this proposal, Lummis is aiming to bridge the gap between traditional financial systems and the growing world of digital assets, signaling a bold step toward embracing the future of finance.