In an interview with “What Bitcoin Did,” U.S Senator-elect Cynthia Lummis said she wants to broaden the conversation in Congress around bitcoin when she assumes office in January.
Cynthia Lummis, a Republican politician, has been elected to succeed Mike Enzi in 2020 as Wyoming’s Senator. Her peers have been sceptical of cryptocurrency.
However, she believes that cryptocurrency, specifically bitcoin, is a better store of value than paper money and can even be used to lower the U.S national debt. A store of value is anything that retains purchasing power into the future rather than depreciates.
Gold is an excellent example of a store of value, and for an economy to function effectively, the nation’s currency has to be a good store of value.
This is a valid point for bitcoin as there is a finite amount of it; currently, there are only 21 million bitcoins that can be mined in total. Whereas with the U.S dollar, ever since the United States went off the gold standard in 1933, the Federal Reserve has been increasing the supply of dollars in circulation.
At the moment, the U.S national debt is over 27 trillion dollars, and she says that the U.S needs to develop both a plan to get rid of that debt and create an alternate plan if the original fails.
She believes that the alternate method is bitcoin as it has stability in the store of value. Lummis said, “In the case of U.S. currency, inflation is baked into the Federal Reserve’s plan for the U.S. dollar. So, it’s no wonder that our buying power is eroded.
That will not be the case with bitcoin. Bitcoin provides a more stable value to people who are either saving now to live comfortably in the future but also people who are on fixed income or approaching fixed income now.
Bitcoin Is A Store Of Value
” Not only does she want congress to consider bitcoin as an alternative to paying down the national debt, but she also wants to develop a path for cryptocurrency to develop alongside fiat money as it is a “stabilizing mechanism for worldwide exchanges.” Since cryptocurrency is decentralized, it cannot be controlled by governments or authorities but it is something that can utilized by every government. “It’s kind of something that frees governments up to say, there is a backstop,” said Lummis.
“If we reach the point where we have overspent so much that things start crashing down, the black swan event occurs with any regard to any fiat currency…there is a backstop available to every government in the world, and that backstop is bitcoin.” A black swan event is a term used in the finance world to describe an extremely negative rare event that is impossible to predict. These events cause consequences that are random and wide-spread.
Some examples of black swan events are the 9/11 attacks, Brexit, and the U.S 2008 financial crash. So, for a U.S senator to believe in using bitcoin as a way to pay down debt and as a better store of value and as a backstop in the case of another black swan event is extremely major.
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