Former United States treasury secretary Lawrence Summers dismissed President-elect Donald Trump’s plan for a strategic Bitcoin reserve as “crazy” and a means to pander to his crypto campaign donors.
“Some of what is being said, this idea that we should have some kind of national Bitcoin reserve, is crazy,” Summers told Bloomberg TV on Dec. 6.
“I understand why we need a national oil reserve. I understand why a century ago, we accumulated gold in Fort Knox,” he said. “Of all the prices to support, why would the government choose to support, by accumulating a sterile inventory, a bunch of Bitcoin?”
“There’s no reason to do that other than to pander to generous special interest campaign contributors.”
Trump floated the idea during his campaign that the US government should hold onto the Bitcoin it has seized, about 198,000 Bitcoin (BTC) worth over $19 billion, according to Arkham Intelligence.
Some Trump-aligned Republicans, most prominently Wyoming Senator Cynthia Lummis, want to push through a bill that would have the government buy 1 million BTC — about 5% of its total supply — and hold it for at least 20 years.
Still, Summers did say that some of Trump’s rhetoric on crypto is legitimate.
“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 between 1999 and 2001 under the Clinton administration and, in 2016, had a stint as an adviser to the crypto conglomerate Digital Currency Group (DCG).
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Lummis’s Bitcoin reserve push is centered around addressing the country’s $36 trillion national debt.
Avik Roy, president of the think tank the Foundation for Research on Equal Opportunity, said at a crypto summit last month that it is “an overselling of what Bitcoin could do.”
“The Bitcoin reserve is good, but it does not solve the problem,” Roy said, “You still have to actually do the budgetary reforms to get us out of this $2 trillion a year of federal deficits.”
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