US President-elect Donald Trump’s proposal to establish a national Bitcoin reserve has faced criticism from economic experts, including former Treasury Secretary Larry Summers. The plan aims to create a strategic reserve of the cryptocurrency to enhance US financial stability and counter geopolitical rivals.
Summers described the idea as “crazy” and lacking a clear purpose, stating that Bitcoin’s nature as a “sterile inventory” makes it unsuitable for a national reserve. He suggested the proposal may be more “politically motivated than economically sound.”
Trump’s plan is supported by pro-crypto Senator Cynthia Lummis’ legislation to purchase one million Bitcoins over five years, valued at nearly $100 billion. Proponents claim this reserve could help reduce the US national debt without raising taxes and strengthen the dollar.
However, critics like CEO Peter Schiff warn about Bitcoin’s volatility and the risks of using taxpayer dollars to acquire such an asset. They fear that government involvement in Bitcoin could lead to a detrimental cycle of continuous purchasing, ultimately undermining the value of the dollar.
As Trump moves forward with his administration’s crypto policy, venture capitalist David Sacks has been appointed as the White House’s AI and crypto czar, tasked with developing a legal framework for the industry.
Source: https://bitcoinist.com/trumps-national-bitcoin-reserve-proposal-crazy