Former US treasury secretary, Lawrence Summers, recently criticized the idea of a strategic Bitcoin reserve as put forward by President-elect Donald Trump, labeling it as ‘crazy’ and pandering to special interests. Trump had proposed that the US government should retain its seized Bitcoin, currently amounting to around 198,000 Bitcoin, or over $19 billion. This sentiment is echoed by members of his party, including Wyoming Senator Cynthia Lummis, advocating for a bill that would entail the government to purchase 1 million BTC and retain it for a minimum of two decades.
Summers, however, didn’t dismiss all of Trump’s position on cryptocurrency. Recognizing the need to promote financial innovation, he agreed that the sector may have been overly regulated. Summers was engaged as a treasury secretary from 1999 to 2001 under the Clinton administration and later advised the crypto conglomerate, Digital Currency Group, in 2016.
The core argument for a Bitcoin reserve comes from Lummis who views it as a step towards addressing the US’s staggering $36 trillion national debt. Think tank president, Avik Roy, countered this, stating that Bitcoin alone couldn’t solve the problem, and comprehensive budgetary reforms were still indispensable to trim down the mounting federal deficits of $2 trillion annually.