Senator Cynthia Lummis is reportedly preparing to introduce a new legislative proposal at the Bitcoin Conference in Nashville, Tennessee.
Although details about the bill are limited, insiders say its primary goal is to require the Federal Reserve to include Bitcoin (BTC) as a strategic reserve asset, similar to how it uses gold and foreign currencies to maintain the value of the US dollar.
The announcement is expected just before former President Donald Trump's speech. There is also a possibility that Lummis will reveal her plans during a discussion with former Representative Tulsi Gabbard on Friday.
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Alex Chizhik, chief commercial officer at HarrisX, believes that having the Fed hold Bitcoin as a reserve asset would stabilize the US dollar and markets while demonstrating the central bank's commitment to innovation.
Passing this legislation would also be a significant step towards recognizing Bitcoin as a legitimate financial asset, a goal long pursued by the crypto industry. Sam Lyman, director of public policy at Riot Platforms, commented:
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.
The US already holds the largest amount of Bitcoin among nation-states, with approximately 210,000 Bitcoins valued at over $13 million, primarily seized by the Department of Justice from illicit activities.
In contrast, economist and former Trump adviser Steve Moore doubted the need for the legislation, questioning the need to hold Bitcoin as a strategic reserve given the security of US Treasury investments. However, he acknowledged that incorporating Bitcoin could serve as a means for the government to diversify its assets.
If enacted, Lummis' bill could have significant financial implications, potentially driving up Bitcoin prices due to increased demand. At the time of writing, its value stands at $64,154.
The Bitcoin Conference, which will feature figures like Michael Saylor of MicroStrategy and Cathie Wood of Ark Invest, occurs during a heated political climate, with both major parties seeking to attract crypto voters in the upcoming presidential election.
With President Biden stepping aside, Vice President Kamala Harris has emerged as the likely Democratic nominee. As her stance on crypto is still unclear, she faces pressure from pro-crypto Democrats, such as billionaire entrepreneur Mark Cuban, to be more favorable towards the industry.
Meanwhile, Trump, who was once a critic of Bitcoin, has recently demonstrated support for the crypto sector by accepting crypto donations for his presidential campaign and promoting Bitcoin mining.
Thus, the proposed legislation could significantly impact the financial markets and elevate Bitcoin's status, amidst a politically charged atmosphere where both parties are vying for crypto voter support.
