The proposal to create a strategic Bitcoin reserve in the United States is gaining attention, with support from former President Donald Trump. While proponents see it as a step towards ensuring America's financial future, critics warn of risks to Bitcoin's decentralized nature.
The Idea of Bitcoin Reserve
The concept of a national Bitcoin reserve was introduced by Dennis Porter, co-founder of the Satoshi Action Fund in 2022. The idea gained momentum after Trump publicly supported it during a Bitcoin conference in Nashville, Tennessee, in July.
Political Support and Legislation
Republican Sen. Cynthia Lummis of Wyoming has emerged as a leading advocate of a federal Bitcoin reserve, proposing legislation for the government to purchase 1 million Bitcoins over five years. Lummis argues this could help solve the national debt and cement America’s leadership in financial innovation.
Criticism and Alternative Views
Monetary economist George Selgin described the plan as a 'backdoor loan' relying on financial maneuvers. Bitcoin proponents, like Bitcoin Magazine editor-in-chief Mark Goodwin, express concerns that state-controlled reserves could disrupt BTC's decentralized nature. Kathryn Austin Fitts also criticizes the idea, arguing it benefits wealthy Bitcoin holders.
Despite the criticism, Porter and his team continue to push the idea at both federal and state levels. The adoption of a Bitcoin reserve represents not just economic changes, but a significant fight for financial independence.
