Senator Cynthia Lummis of Wyoming has proposed a bill to create a strategic bitcoin reserve in the United States. The bill suggests that the Treasury and Federal Reserve should buy a million bitcoin over five years and store them for at least 20 years. If passed, this would establish bitcoin as a federally-endorsed hedge against various risks. However, there are concerns about where the funding for these purchases would come from. The bill suggests using the Federal Reserve's surplus profits, but currently, there are no surplus profits. Senator Lummis suggests revaluing the Fed's gold certificates to generate the necessary funds. The bill argues that holding 5% of bitcoin's total supply would diversify US assets and strengthen resilience. However, the bitcoins in the reserve cannot be touched until 2045, making it more of a long-term gamble than a reserve. Bitcoin has shown more than speculative potential, with research showing its use in moving money offshore and in certain economic scenarios. However, its utility is limited in countries with stable banking systems. The likelihood of the bill's success may depend on the appointment of Scott Bessent as the Treasury Secretary, as he is reportedly a lover of cryptos. However, establishing a bitcoin reserve would tie the US government's economic policies to a volatile asset.



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