Former U.S. Treasury Secretary Lawrence Summers criticized President-elect Donald Trump’s proposal for a strategic Bitcoin reserve, calling it “crazy” and a move to appease crypto campaign donors.
“Some of what is being said, this idea that we should have some kind of national Bitcoin reserve, is crazy,” Summers stated in an interview with Bloomberg TV on Dec. 6.
“I understand why we need a national oil reserve. I understand why a century ago, we accumulated gold in Fort Knox,” he added. “Of all the prices to support, why would the government choose to support, by accumulating a sterile inventory, a bunch of Bitcoin?”
“There’s no reason to do that other than to pander to generous special interest campaign contributors.”
Trump proposed that the U.S. government hold onto its seized Bitcoin, currently amounting to approximately 198,000 BTC worth over $19 billion, according to Arkham Intelligence.
Some Trump-aligned Republicans, like Wyoming Senator Cynthia Lummis, are pushing for legislation to acquire 1 million BTC — about 5% of the total supply — and hold it for at least 20 years.
Despite his criticism, Summers acknowledged some validity in Trump’s views on cryptocurrency.
“I think we need to support financial innovation wherever it may go, and there are probably respects in which crypto has been over-regulated by overzealous regulators,” he said.
Summers, who served as treasury secretary from 1999 to 2001 under President Clinton, also had a brief advisory role with the crypto conglomerate Digital Currency Group (DCG) in 2016.
Lummis’s push for a Bitcoin reserve aims to address the $36 trillion national debt.
However, Avik Roy, president of the Foundation for Research on Equal Opportunity, cautioned that the proposal is not a comprehensive solution.
“The Bitcoin reserve is good, but it does not solve the problem,” Roy stated at a crypto summit. “You still have to actually do the budgetary reforms to get us out of this $2 trillion a year of federal deficits.”
