Cynthia Lummis, Self-Proclaimed “Bitcoin Senator,” Has Suggested Selling Some of the Government’s Gold to Fund the President-elect's Proposed Bitcoin Reserve

The Republican Senator's bill will help the U.S. acquire 1 million BTC without increasing its government deficit.

Republican Senator Cynthia Lummis, a self-proclaimed “Bitcoin senator” and close ally of President-elect Donald Trump, has proposed selling some of the government’s gold to fund Trump's proposed plan to create a Bitcoin stockpile.

The bill would help the U.S. acquire 1 million BTC without increasing its government deficit. The cryptocurrency recently overtook silver to become the world’s eighth-largest asset.

Lummis first revealed the bill during the Bitcoin 2024 conference in July. The move came shortly after Trump shared his goal of creating a Bitcoin reserve within the government.

The reserve would function similarly to traditional gold reserves, serving as a hedge against inflation and an alternative to fiat currency, which Trump argues is subject to devaluation due to policies like high government spending and “money printing” during crises.

Trump and his allies argue that holding Bitcoin could reduce the national debt in the long term, especially if Bitcoin's value rises significantly.

Upon his first announcement of the reserve, the President-elect did not mention buying 1 million Bitcoin but instead said the government would hold 200,000 tokens it had already seized.

Lummis' bill would see the government purchase an additional one million Bitcoin over five years, at a cost of about $90 billion at current market rates. Talking to Bloomberg, Lummis said: “We already have the financial assets in the form of gold certificates to convert to Bitcoin. So the effect on the U.S. balance sheet is pretty neutral.”

The purchase price will likely increase as investors are expected to flock to buy the digital asset. In the latest Federal Reserve balance sheet, the Treasury reports holding gold valued at $11 billion. However, this price has been unchanged since 1973, and today's prices would value the gold reserve at about $675 billion.

The bill would also involve establishing a “decentralized network of secure Bitcoin storage facilities” around the country.

“Establishing a strategic Bitcoin reserve to bolster the U.S. dollar with a digital hard asset will secure our nation’s standing as the global financial leader for decades to come,” Lummis said.

Trump has had a tumultuous journey with the crypto industry. In just 2021, the President-elect slammed Bitcoin as a “scam,” claiming he didn't like it because “it's another currency competing against the dollar.”

But Trump doubled down on his crypto views in the run-up to his second presidential victory, vowing to make America the “crypto capital of the world.”

Along with a Bitcoin reserve, the President-elect voiced his intention to foster U.S. dominance in Bitcoin mining and vowed to fire SEC Chairman Gary Gensler on his first day in office.

Gensler has been a driving force in the SEC's crackdown on crypto companies, with the majority of the sector believing he has been too aggressive in his enforcement actions.

Legal experts claim Trump will not have the power to fire Gensler directly. Instead, he could appoint a new commissioner to lead the SEC and pursue policies aligned with a pro-crypto agenda.