Fed Acquiring Bitcoin Is Hedge Against Themselves, Says Gabor Gurbacs
The Federal Reserve acquiring bitcoin would be a hedge against themselves, diversify holdings and safeguard against inflation, says Gabor Gurbacs, former VanEck advisor.
Speaking at the Bitcoin 2024 Nashville conference, U.S. Senator Cynthia Lummis made clear plans to convert excess reserves at twelve Federal Reserve banks into bitcoin over five years.
Lummis, a lawmaker, revealed that she is drafting a bil l to instruct the government to build a stockpile of 1 million BTC over a five-year period. The government would have to hold bitcoin for a minimum of 20 years. The bitcoin held during that time could only be used to pay down the US national debt.
We will convert excess reserves at our 12 Federal Reserve banks into #bitcoin over five years. We have the money now! pic.twitter.com/fGtYQ15jQJ
— Senator Cynthia Lummis (@SenLummis) July 27, 2024
This triggered a discussion on the social media platform X, with former Wall Street Journal reporter and author Paul Vigna questioning the logic behind the Fed acquiring bitcoin.
“She [Lummis] wants to transfer money the Fed holds out of the safest asset in the world, Treasuries, into the most volatile. What benefit does that provide to the Fed or federal government? I’m honestly asking,” said Vigna using platform X.
Gurbacs responded that the logic behind the Fed acquiring bitcoin instead of U.S. treasuries is predicated on the fundamental difference between the two assets: one can be printed and the other cannot.
The logic behind the Fed acquiring Bitcoin instead of U.S. treasuries is predicated on the fundamental difference between the two assets: one can be printed and the other cannot.
This is essentially a hard asset acquisition strategy, similar to what central banks do
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