- Wyoming Sen. Cynthia Lummis plans to announce legislation that would require the Federal Reserve to hold bitcoin as a strategic reserve asset at the annual Bitcoin Conference in Nashville.
- The proposed legislation aims to direct the Fed to buy and hold bitcoin as a reserve asset, similar to how it holds gold and foreign currencies to manage the U.S. monetary system and maintain the value of the dollar.
- Republican presidential candidate Donald Trump is scheduled to speak at the same conference, and Lummis’ staff hopes he will endorse the bill and the idea behind it.
Wyoming Senator Cynthia Lummis is planning to announce legislation that would require the Federal Reserve to hold bitcoin as a reserve asset, according to sources familiar with the matter. The Republican lawmaker may reveal her plans at the Bitcoin 2024 conference in Nashville this weekend.
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— BlockNews.com (@blocknewsdotcom) July 24, 2024Senator Lummis will announce her strategic #Bitcoin reserve policy at The Bitcoin Conference this week pic.twitter.com/dLshuqAPv0
Details of the Legislation
Lummis has been quietly crafting a bill that would direct the Fed to purchase and hold bitcoin, similar to how it holds gold and foreign currencies. This would help stabilize the dollar and legitimize bitcoin as a financial asset.
The senator has been shopping the idea to colleagues on the Senate Banking Committee in hopes of gaining co-sponsors. Specific details remain unclear, but the legislation aims to cement bitcoin’s status in the mainstream financial system.
Potential Impact
Declaring bitcoin a reserve asset would send a strong signal of its acceptance and could trigger other countries to follow suit. While implementation faces challenges, the act of introducing such legislation is significant on its own.
The move could be controversial, with some experts saying it could weaken the dollar or prove difficult for the Fed to execute. But it would represent a major milestone for the cryptocurrency industry.
Background and Support
The notion of utilizing bitcoin reserves has gained traction recently. Lummis previously suggested diversifying the Fed’s holdings with bitcoin to strengthen the dollar over time.
The idea also won tentative support from Donald Trump, who is scheduled to speak at the conference. The former president recently embraced crypto assets like bitcoin as an alternative to Chinese dominance.
Meanwhile, Wall Street has warmed up to bitcoin, with BlackRock launching a bitcoin ETF this year. The asset manager’s CEO Larry Fink now refers to it as “digital gold.”
The legislation faces long odds, but the growing advocacy across political and financial circles shows the rising status of cryptocurrency. Lummis’ plan marks the highest-profile political effort yet to bring bitcoin into the economic mainstream.
