There’s a Problem With Senator Lummis’ Bitcoin Reserve Plan, Cato Institute Expert Says

Senator Cynthia Lummis’ plan to build a government Bitcoin reserve of 1 million BTC within the next five years has been called into question by an expert from the Cato Institute. According to George Selgin, the plan is much less ambitious than Lummis initially suggested. While the details of the plan have not been released, Selgin claims that it involves the U.S. Treasury purchasing 1 million Bitcoin, rather than using excess reserves from the Federal Reserve. Part of this purchase would be funded by revaluing the Treasury’s gold held in Fort Knox. Selgin explains that this revaluation process would result in the Treasury having more than enough money to acquire the BTC at the current market price. However, Selgin raises concerns about the proposal’s impact on commercial bank stability and the Federal Reserve’s ability to generate revenue without Treasury bills to back the increase in reserves. Overall, Selgin remains skeptical of the plan and questions why the Treasury should hold gold or BTC instead of using those assets to pay down debt or fund other public endeavors.