The Fed should sell its 70s-era gold stockpile and buy bitcoin to establish a crypto reserve, Sen. Cynthia Lummis says

• Sen. Cynthia Lummis says the Fed should sell some of its gold reserves to buy bitcoin.
• Sen. Lummis believes a bitcoin reserve could strengthen the dollar and help reduce the US debt pile.
• Bitcoin hit a record high on Thursday, nearing the $100,000 milestone.

Republican Senator Cynthia Lummis of Wyoming said in an interview with CNBC on Thursday that the Federal Reserve should sell some of its 1970s-era gold reserves to buy bitcoin.

Lummis, who has been a longtime bitcoin bull and said she owned five bitcoins before putting them in a blind trust, wants the government to build a stockpile of bitcoin and hold it for at least 20 years.

"The proposal that I have and that President Trump has discussed [is] about a strategic bitcoin reserve," Lummis said.

Lummis argued that a government bitcoin stockpile could help the US shore up the dollar as the world's reserve currency and even help it reduce its debt burden.

That's based on the idea that bitcoin would continue to deliver the same monster gains it has since its inception in 2009 going forward.

Bitcoin touched a record high of $99,121 on Thursday, well within spitting distance of the highly anticipated $100,000 milestone.

"This is the gold standard digital asset, and a strategic bitcoin reserve is the way to embed it," Lummis said.

President-elect Donald Trump said at a bitcoin conference in July that he would create a "bitcoin national stockpile" and ensure that the US will be "the crypto capital of the planet and the bitcoin superpower of the world."

Lummis said the government wouldn't have to add to its already massive debt pile to buy more bitcoin, because the Fed could cash in some of its gold reserves and use the proceeds to buy bitcoin.

"We have reserves at our 12 Federal Reserve banks, including gold certificates that could be converted to current fair market value. They're held at their 1970s value on the books. And then sell them into bitcoin, that way we wouldn't have to use any new dollars in order to establish this reserve," Lummis explained.

Such a move would add to the US government's current bitcoin holdings of about 203,000, which has been sourced via asset forfeitures.

Lummis also said that with the incoming Trump administration, there's increased appetite for bitcoin-friendly policies, including the potential for a statutory framework for digital assets in early 2025.

Lummis and New York Sen. Kirsten Gillibrand have been working on such legislation, which would create a regulatory framework for digital assets like bitcoin and stablecoins.