Senator Cynthia Lummis of Wyoming has proposed that the Federal Reserve should keep bitcoin on its balance sheet.
"I believe it's a terrific idea to be honest," Lummis said on a panel held by the Orrin G. Hatch Foundation on Thursday. The Fed maintains over $40 billion in foreign currency reserves, so buying bitcoin would be "a great idea to be honest."
Lummis was responding to a question from panel moderator and Hatch Foundation executive director Matt Sandgren, who was hosting the session on the future of the crypto economy.
"That will make a lot of sense until there is a statutory and regulatory framework," Lummis added. "Because bitcoin is entirely decentralized, it will become more pervasive over time, and I believe it will be something the Fed should retain on its balance sheet."
Former Fed vice chairman for supervision Randal Quarles was also on the panel, but he believes bitcoin will not be added to the central bank's balance sheet anytime soon.
"I think it's preferable to preserve the Fed's balance sheet, which it isn't today, [but] it needs to trend further in that direction — completely treasuries," Quarles said.
Lummis, on the other hand, has long been pro-crypto and an outspoken supporter of the business. The 67-year-old congressman initially purchased bitcoin in 2013, when the price was around $350. The price of bitcoin is currently about $41,000.
On the panel, Lummis said that her son-in-law showed her how to buy bitcoin. Lummis said her previous job as Wyoming treasurer forced her to look into a variety of assets, some of which could have provided short-term income and others which could have served as a store of value, and it was during this time that she learned more about bitcoin and realized its value as a store of value.
"Bitcoin is a form of digital gold." It's a tough financial situation. Only 21 million will ever be created.
Traditional banks, according to Lummis, will eventually integrate bitcoin and other digital assets into their products and create cryptocurrency departments.
Recently, the senator has taken a number of crypto-related activities. Lummis surreptitiously circulated a draft bill around officials and the crypto industry in December. The measure aims to clarify crypto regulatory issues in a variety of ways.
The measure is presently being reviewed by the legislative council, according to Lummis, who added that it will be made public "very soon."