Former President Donald Trump has recently proposed a novel solution to tackle the United States' whopping $35 trillion national debt. In an interview on Fox news, Trump, the Republican Party's 2024 presidential nominee, lauded the crypto industry's potential and emphasized the need for the US to innovate in the digital asset space to stay competitive globally. He even floated the idea of using bitcoin or a "crypto check" to wipe out the massive national debt, stating, "Who knows, maybe we'll pay off our $35 trillion dollar national debt, hand them a little crypto check, right? We'll hand them a little bitcoin and wipe away our $35 trillion."
The Growing US Debt Crisis
The ex-president's unconventional suggestion comes at a critical juncture as the US government grapples with mounting debt issues. The relentless devaluation of the US dollar, fueled by excessive currency printing for debt servicing, has boosted bitcoin's value compared to fiat currency.
Highlighting the severity of the situation, it took approximately 200 years for the US national debt to hit $1 trillion historically. Today, the debt increases by the same amount roughly every three months due to deficit spending. In June alone, a staggering 76% of all income tax revenue went towards servicing the debt interest, underscoring its significance as one of the largest expenses in the US fiscal budget.
With its limited and predetermined supply, bitcoin has the potential to divert value from the current US dollar system, potentially averting a catastrophic currency collapse akin to the Weimar Republic's experience in the early 20th century.
Lummis's bitcoin Reserve Proposal
Senator Cynthia Lummis has introduced a groundbreaking bill to establish a bitcoin strategic reserve in the US. The initiative aims to mitigate the adverse effects of rampant money printing and safeguard America's financial supremacy in global markets and trade.
The Wyoming Senator's proposal calls for the US Treasury to acquire and preserve 5% of bitcoin's total supply for at least two decades as a hedge against currency devaluation caused by the Federal Reserve's monetary policies and fiscal mismanagement.
Trump's stance on cryptocurrencies has evolved over time, having previously labeled bitcoin as a "scam." However, he recently made a surprising pivot, pledging to end the Biden administration's alleged "war on crypto." In a notable shift, Trump vowed to support the crypto industry and position the US as a leader in the sector if re-elected.
Opinion polls reveal a growing emphasis on candidates' crypto policies among US voters, with one in three considering these factors before casting their votes. A study by prominent crypto venture capital firm Paradigm further indicates that Trump's prospects for the 2024 US Presidential Election enjoy substantial backing from the crypto community.
