Expert Dismisses Bitcoin Reserve as a Solution to U.S. Debt Crisis

The idea of establishing a strategic Bitcoin reserve to tackle the U.S. national debt, proposed by Senator Cynthia Lummis, is unlikely to resolve the country’s ongoing debt crisis, according to Avik Roy, president of the Foundation for Research on Equal Opportunity.

Speaking at the North American Blockchain Summit 2024 in Dallas, Roy dismissed the notion that Bitcoin could be a silver bullet for the U.S. debt, which has ballooned to $35 trillion.

Roy acknowledged that purchasing a large amount of Bitcoin, which could appreciate over time, might help in some capacity, but he argued that it would not be a cure for the national debt. He pointed out that even with a Bitcoin reserve, substantial budgetary reforms are still required to address the yearly $2 trillion federal deficits. However, Roy noted that a Bitcoin reserve could potentially stabilize the bond markets by providing confidence that the U.S. isn’t on the brink of financial collapse.

He also expressed concerns that the U.S. might eventually deplete its Bitcoin reserves, recalling the country’s history of selling off gold reserves in the 1970s. Since 1981, the national debt has grown at an annual rate of 5.3%, increasing from $3.81 trillion to its current $35.46 trillion.

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Lummis’ Bitcoin Act, introduced in July, proposes that the U.S. government purchase 1 million BTC—roughly 5% of the total supply—and hold it for at least 20 years. Additionally, Lummis suggests converting part of the U.S. Treasury’s gold holdings, worth approximately $448 billion, into Bitcoin. The idea has garnered attention, with President-elect Donald Trump also promising to establish a national Bitcoin stockpile upon taking office.

Source

Kosta Gushterov