The U.S. considers leveraging Bitcoin reserves following Trump’s election win, as officials explore crypto’s role in economic strategy.
- Following Trump’s election, Representative Cynthia Lummis has called for the United States to embrace Bitcoin as a strategic reserve.
- The idea proposes the acquisition of one million Bitcoins to promote national economic stability and debt management.
Following Donald Trump’s election, Representative Cynthia Lummis has renewed her plea. The U.S to use Bitcoin as a strategic reserve to combat increasing inflation and debt.
Strategic Bitcoin Reserve Initiative
Lummis’ Bitcoin Act of 2024, introduced in July. Proposes to require the Federal Reserve to include Bitcoin into the United States’ economic policy. The act recommends acquiring 1 million Bitcoins. Or around 5% of the entire production, to be kept for at least 20 years for debt repayment. This approach is consistent with Trump’s agenda. Since he has signaled a desire to keep Bitcoin reserves for national strategic objectives.
Economic Implications and Feasibility
River Inc. underlines that, while ambitious, this Bitcoin strategy has the ability to stabilize financial growth in the face of an increasing $35 trillion national debt.Bitcoin has outperformed other investment classes since 2014, highlighting its potential in national budgetary strategies. However, the possibility of Bitcoin significantly reducing the national debt through its market performance remains theoretical.
If the US makes Bitcoin purchases, other countries may follow suit, increasing the worldwide demand and value of the cryptocurrency. Nonetheless, the proposal’s success is contingent on Congressional approval, which may be difficult given the perceived hazards connected with digital assets.
With the Republican Party making major gains in the Senate and maybe in the House, there may be a more favorable legislative environment for incorporating digital assets into US economic strategy going ahead. This effort is a key step toward integrating digital assets into traditional financial institutions, with the potential to reshape national reserve policies worldwide.
Read more: Bitcoin Hits Record $75,000 as Crypto Industry Celebrates Trump Win
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