US Senator Advocates for Gold Sales to Fund Major Bitcoin Reserves

A US senator has proposed selling gold reserves to create a strategic bitcoin reserve, a groundbreaking step to strengthen the dollar and address the US national debt.

Selling gold for Bitcoin: A game-changing proposal from a US senator 

During a CNBC interview on Thursday, US Senator Cynthia Lummis (R-WY) gave thoughts as Bitcoin reached a historic high. She linked BTC's price swings to two main factors: growing support for digital asset legislation and increasing debates about a strategic bitcoin reserve.

Lummis cited her collaboration with Senator Kirsten Gillibrand (D-NY) on crypto legislation, which is slated to be introduced in early 2025, as evidence of the growing desire in Washington for clear crypto guidelines, saying:

There’s an appetite now to do a statutory framework for digital assets.

Another element she identified was the market's reaction to ambitious plans, such as establishing a strategic bitcoin reserve. This hypothesis implies that the US government may use Bitcoin to strengthen the dollar and handle the national debt. President-elect Donald Trump has proposed constructing a strategic bitcoin reserve in the United States, to position the country as a leader in cryptocurrency innovation. This plan is consistent with Lummis' Bitcoin Act, which was launched in July and urges that the US Treasury collect one million bitcoins over five years.

Lummis underlined that the United States could construct the reserve without using additional funds by leveraging existing assets. Reserves at the 12 federal reserve banks, including gold certificates valued in the 1970s, could be adjusted to current market value and converted into bitcoin, she proposed. Furthermore, Lummis stated that the government already has approximately 200,000 BTC in asset forfeiture, providing a starting source for the reserve without necessitating fresh expenditures.

The lawmaker opined:

This would be an asset that could help shore up the U.S. dollar as the world reserve currency and serve as a reserve that could be used to reduce the national debt significantly.

Lummis responded to worries about a conflict of interest by clarifying that her Bitcoin holdings are in a blind trust. "I had five.

Bitcoins and put them along with other stocks I owned into a blind trust," she told me. A blind trust is a financial arrangement in which a third party manages assets on behalf of the trust's owner, but the owner has no knowledge or control over the precise holdings or transactions. This approach is commonly employed to eliminate potential conflicts of interest, especially for public officials or those in positions of power.

The senator finished by emphasizing that bitcoin is a commodity, saying, "Bitcoin is legal tender in another country, and we need to recognize that as Americans, bitcoin is a store of value and a means of exchange with commodity characteristics, so it's very different from other assets."