Bipartisan Movement Grows for Strategic Bitcoin Reserve as Lawmakers Eye National Holdings

Bipartisan support for the idea of bitcoin as a strategic reserve asset is growing. Representative Ro Khanna, the first Democrat in Congress to back this initiative, joins a growing group of lawmakers. This group is led by Republican Senator Cynthia Lummis, who emphasizes the importance of including bitcoin in the nation's balance sheet.

Senator Lummis sees this as a pivotal moment. She compares it to the Louisiana Purchase. At the Bitcoin Nashville conference in July, she introduced legislation to create a strategic bitcoin reserve. This would use existing funds from the Federal Reserve and the Treasury to buy 1 million bitcoin. If successful, the U.S. would become the largest holder of bitcoin among nation-states, owning five percent of the entire network. That's comparable to the country’s stake in global gold supplies.

Her comparison to the Louisiana Purchase resonated with crypto supporters. Back in 1803, President Thomas Jefferson made a significant investment by purchasing the Louisiana Territory. That investment paid off big time. Now, in 2024, policymakers who support innovation see a similar opportunity with bitcoin.

On the same day Lummis released her bill, former President Donald Trump outlined his own plan. He wants to create a “national bitcoin stockpile” and promised to “never sell” the roughly 200,000 bitcoin currently owned by the U.S. government. He likened bitcoin to “the steel industry of 100 years ago” and aims to make the U.S. “the crypto capital of the planet.”

At that same conference, Robert F. Kennedy Jr. proposed a different plan. He suggested acquiring 5 million bitcoin, which would be about 25 percent of the global supply. Kennedy has since suspended his presidential campaign and is now advising Trump on the campaign trail.

Support for a strategic bitcoin reserve has crossed party lines. Recently, in an episode of the Unchained Podcast, Representative Khanna expressed his support. He stated the need to include bitcoin as a reserve asset for the Federal Reserve, citing its potential for appreciation and its ability to help America set financial standards.

The majority of bitcoin held by the U.S. government was confiscated from illegal activities. Traditionally, the government would sell these assets. However, Khanna believes the government should keep these bitcoins as a strategic reserve asset due to their growth potential. His office stated, “Bitcoin that has been seized by the U.S. government should be used as a strategic reserve asset given its potential for appreciation.”

Khanna is a significant voice on crypto issues in the Democratic Caucus. In July, he led a letter to the Democratic National Committee urging them to change the perception that the party has a negative view on digital assets. The letter pushed for what has been called “the crypto reset,” which includes adding pro-digital asset language to the party platform, engaging with industry experts, and appointing a pro-innovation chair to the Securities and Exchange Commission.

Some advocates believe supporting a strategic bitcoin reserve could be an easy way to achieve a “crypto reset” without needing to replace the current SEC Chair.

Dennis Porter, CEO of the Satoshi Action Fund, a nonprofit focused on educating lawmakers about bitcoin, noted that supporting initiatives like a strategic bitcoin reserve or the “right to self-custody” would help Democrats attract the growing Bitcoin voter base. He believes that partisanship around bitcoin is temporary and will fade as the asset matures. He said, “There is consensus across the political spectrum on the importance of a strategic gold reserve and maintaining a strategic oil reserve. Now, both sides recognize the need for a strategic bitcoin reserve.”

Representative Khanna shares this view. He stated, “You can't be against bitcoin or crypto. It's like saying, ‘I'm against the iPhone’ or ‘I'm against the laptop.’ It's just a technology.”

Khanna has influenced Vice President Kamala Harris to adopt a pro-innovation stance on cryptocurrency. Thanks to his efforts, the Harris team recently released a policy document expressing the campaign’s desire to “encourage innovative technologies like AI and digital assets.” In a recent episode of the Coin Stories Podcast, Khanna expressed confidence that Vice President Harris would support Bitcoin if she wins the presidency in November, unlike President Biden.

Cody Carbone, President of The Digital Chamber, views a strategic bitcoin reserve as essential to the Democrats' “crypto reset.” He stated, “There is an opportunity for Democrats to shift from opposing bitcoin to leveraging its success and potential to advance party goals in financial equity and sustainable energy policy. Supporting a strategic bitcoin reserve is a good place to start.”

Senator Lummis also envisions a bipartisan future for bitcoin. She encourages both Republicans and Democrats to support her bill for creating a strategic bitcoin reserve. In a statement, she said, “Although the Republican National Committee and President Trump have shown strong support for bitcoin and digital assets, I expect my colleagues across the aisle to join us in supporting digital assets, especially as it has become a critical focus of the 2024 election.”

Data shows that backing bitcoin is a smart move for members of both political parties. From an electoral perspective, embracing digital assets offers significant upside with minimal downside. This increases the likelihood of continued bipartisan support for a strategic bitcoin reserve.