Former United States Treasury Secretary Lawrence Summers criticized President-elect Donald Trump’s proposal for a strategic Bitcoin reserve, calling it “crazy” and accusing it of being a move designed to appease his cryptocurrency campaign donors.
“Some of what is being said — this idea that we should have some kind of national Bitcoin reserve — is crazy. “There’s no reason to do that other than to pander to generous special-interest campaign contributors,” Summers said.
Summers noted that he understands the need for a national oil reserve and why gold is accumulated in Fort Knox, but of all of the prices to support, why would the government choose to support, by accumulating a sterile inventory, a bunch of Bitcoin?” he added.
1M BTC Acquired For 20 Years
The former secretary further stated that during Trump’s campaign, he proposed that the United States government retain the approximately 198,000 Bitcoin it has seized, which is valued at over $19 billion, according to data from Arkham Intelligence.
Meanwhile, some Trump-aligned Republicans, notably Wyoming Senator Cynthia Lummis, advocated for legislation that would authorize the government to acquire 1 million BTC — roughly 5% of the total supply — and hold it for at least 20 years. Lummis’s advocacy for a Bitcoin reserve was driven by her focus on tackling the nation’s $36 trillion debt.
However, Summers acknowledged that certain aspects of Trump’s rhetoric on crypto have merit.
“I think we need to support financial innovation wherever it may go, and there are probably respects in which crypto has been over-regulated by overzealous regulators,” he said.
Summers served as Treasury Secretary from 1999 to 2001 under the Clinton administration and briefly served as an advisor to the cryptocurrency conglomerate Digital Currency Group (DCG) in 2016.
Is a Bitcoin Reserve Important?
Summers is not the only person who has something to say about Bitcoin reserves. For instance, Avik Roy, president of the Foundation for Research on Equal Opportunity, stated at a crypto summit last month that Bitcoin’s potential benefits are being “overhyped.”
Additionally, Roy noted that Bitcoin reserves have merits, but they are not a solution to the problem. He further explained the need for budgetary reforms to address the $2 trillion annual federal deficit.
Despite the debate on Bitcoin reserves, several institutions are considering BTC as their reserve. For instance, the House of Representatives of Pennsylvania, the fifth-most populous state in the US, plans to foster crypto adoption by passing a law to add bitcoin to the state balance sheet as a reserve asset.
