According to a Fox report, Senator Cynthia Lummis of Wyoming is allegedly ready to introduce legislation that could herald a profound shift in the status of Bitcoin, positioning it as a mainstream financial asset on par with traditional reserves like gold in the US.
As anticipation mounts ahead of her possible announcement at the annual Bitcoin Conference in Nashville, July 25-27, a wave of speculation surrounds the potential impact of this initiative.
Federal Reserve To Hold Bitcoin As Strategic Reserve Asset
Per the report, Senator Lummis, a staunch advocate for cryptocurrency and a figure in the pro-crypto movement among lawmarkers in the US, aims to unveil a bill that would mandate the Federal Reserve (Fed) to acquire and hold BTC as a strategic reserve asset.
While details of the proposed legislation remain veiled in the shadows, insiders with knowledge of the bill’s preliminary drafts, told Fox that the bill seeks to institutionalize Bitcoin within the framework of the US monetary system, similar to the role played by traditional reserve assets in stabilizing the value of the US dollar.
Despite the challenges posed by skepticism and regulatory hurdles under the current administration, analysts and lawmakers believe that the potential integration of Bitcoin as a reserve asset represents a significant milestone in the evolution of crypto, further signaling a shift towards broader acceptance and recognition of not only BTC, but also of the entire industry.
Crypto Game Changer?
If the proposed legislation is supported by President Trump, who has also received recommendations and advice on the issue, with growing speculation that the former president may also announce a similar approach, the report notes that it could serve as a watershed moment in recognizing Bitcoin’s legitimacy as a financial asset, coupled with the already successful ETFs approved in January.
The report further notes that supporters of the bill argue that accepting BTC as a reserve asset not only supports the stability of the US dollar, but it would also underscore the Federal Reserve’s commitment to embracing innovation.
This would be in stark contrast to what traditional and crypto markets have experienced under President Biden’s administration in recent years. For one, Sam Lyman, director of public policy at Bitcoin mining company Riot Platforms, told Fox:
Classifying the world’s largest cryptocurrency as a strategic reserve asset would be the firing gun in the ‘Bitcoin Space Race. If the United States – the wealthiest country in the world and the home of global capital – began accumulating bitcoin on its balance sheet, other countries would have powerful incentives to do the same.
Ahead of the much-anticipated conference, BTC continues to trade within its range of $65,900 to $68,000 that has been established over the past few days.
Currently, the largest cryptocurrency on the market is registering slight gains of 0.4% over the past 24 hours. However, a decline in trading volume has surged with a decrease of 18%, amounting to $26 billion, according to CoinGecko data.
Featured image from DALL-E, chart from TradingView.com