Congress discussing bill to allow Fed to hold Bitcoin: Lummis

Speaking in an interview with Yahoo Finance, Senator Cynthia Lummis outlined a plan to give the Federal Reserve authority to purchase and hold Bitcoin and integrate Bitcoin as a key asset into the nation’s financial strategy.

Federal Reserve Chairman Jerome Powell stated at the last FOMC meeting that the institution does not currently have the legal authority to own Bitcoin (BTC). Lummis aims to change this with new legislation.

“I want to give it to them,” he told Yahoo Finance. His proposal calls for the US government to purchase 200,000 Bitcoins per year for five years (one million Bitcoins in total) and hold it for at least 20 years. According to their estimates, this reserve could reach a value of $16 trillion over time.

“I want our federal government to have a strategic Bitcoin reserve that can help support the U.S. dollar,” Lummis said.

Benefits of the reserve

Lummis emphasized that a Bitcoin reserve could provide several benefits, including strengthening the US dollar and easing the challenges posed by the country’s significant debt. The proposal also proposes transferring approximately 200,000 Bitcoins into reserve from the US Asset Forfeiture Fund seized during law enforcement operations.

Despite Bitcoin’s volatility, Lummis sees it as an ideal strategic asset and likens it to digital gold. “This is a finite resource; only 21 million Bitcoins will be mined,” he said, underlining its scarcity and potential for long-term value growth.