beincrypto.com
Republican Senator Cynthia Lummis of Wyoming plans to introduce legislation to increase the government’s Bitcoin holdings by selling a portion of the Federal Reserve’s gold.
This move aligns with former President Donald Trump’s reported interest in establishing a strategic Bitcoin reserve.
The New Government Is Already Moving Towards a Bitcoin Reserve
According to Bloomberg reports, Lummis’ proposal calls for the acquisition of 1 million Bitcoin, roughly 5% of the total supply, at an estimated cost of $90 billion based on current prices.
This ambitious plan involves liquidating some of the Fed’s gold to finance the purchases without increasing the national deficit.
“We will convert excess reserves at our 12 Federal Reserve banks into bitcoin over five years. We have the money now,” said Senator Lummins back in July at the Bitcoin 2024 Conference.
The proposed reserve would significantly expand the government’s current Bitcoin holdings. The US government’s BTC holdings currently stand at around 200,000 tokens from previous asset seizures.
Although these BTC holdings have been safe from any malicious incidents so far, the government’s other crypto wallets have lost nearly $20 million to an earlier breach in October.
Under the bill, the 1 million Bitcoin would be held for at least 20 years, with anticipated value growth potentially aiding in reducing the national debt.
If enacted, the plan could drive significant market activity, potentially increasing Bitcoin’s price as investors react to the government’s large-scale buying. The bill is expected to be introduced when the new Congress convenes next year.
The US is Heading Toward a Pro-Crypto Economy
The re-election of Donald Trump is seemingly changing the entire US crypto regulatory scene, even before he enters the White House in January. As recently reported by BeInCrypto, Trump’s transition team is already considering three pro-crypto candidates to replace the current SEC chain Gary Gensler.
Gensler has apparently accepted his likely outsing, as he published a seemingly farewell speech earlier today. In the statement, Gensler defended his strict crypto policies, emphasizing that digital assets pose significant investor harm.
Nevertheless, the US regulatory stance toward crypto has already started changing. The state of Pennsylvania proposed a new bill to establish a state Bitcoin reserve earlier today.
The bill proposed allocating 10% of state funds to accumulate Bitcoin. According to Republican senators, this would help the state mitigate inflation and diversify its investments.
Recent reports have also suggested that Trump is considering Scott Bessent for the role of US Treasury Secretary. Bessent has been a long-term advocate for crypto.