Peter Schiff, a well-known economist and vocal critic of Bitcoin, has recently made headlines with his strong stance against the idea of a Strategic Bitcoin Reserve. Schiff argues that the establishment of such a reserve, similar to the Strategic Petroleum Reserve, would be a grave mistake for the United States. He emphasizes that the Lummis bill, which proposes the creation of a Strategic Bitcoin Reserve, has not garnered any co-sponsors since its introduction nearly six months ago. This lack of support suggests that the bill has little chance of passing.
Schiff’s concerns are rooted in the Constitution, which defines silver and gold as money and the only things that can be made legal tender. The Constitution authorizes the U.S. government to coin gold and silver, but it does not extend this authority to Bitcoin or other cryptocurrencies. Schiff argues that Bitcoin, unlike silver and gold, does not have the same historical and constitutional backing as a form of legal tender.
The Lummis bill, officially known as the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act, aims to establish a decentralized network of secure Bitcoin vaults operated by the U.S. Department of Treasury. The bill proposes a 1-million-unit Bitcoin purchase program to acquire approximately 5% of the total Bitcoin supply. However, Schiff warns that such a move could destabilize the U.S. dollar and lead to significant economic consequences.
Schiff’s skepticism towards Bitcoin is not new. He has long criticized the cryptocurrency, arguing that it lacks intrinsic value and is prone to extreme volatility. Schiff believes that relying on Bitcoin as a strategic reserve could undermine the stability of the U.S. financial system. He points out that the price of Bitcoin is highly speculative and subject to dramatic fluctuations, making it an unreliable store of value.
The Strategic Petroleum Reserve was established by an act of Congress. A Strategic #Bitcoin reserve must be established in the same way. The Lummis bill, introduced almost six months ago, doesn't have a single co-sponsor. A bill with minimal support has little chance of passing.
— Peter Schiff (@PeterSchiff) January 18, 2025
Sources:
https://decrypt.co/295776/bitcoin-critic-peter-schiff-us-sell-seized-btc
https://constitution.congress.gov/browse/article-1/section-10/
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