During a February 16 webinar[1] on “crypto” hosted by the Hatch Center, the policy arm of national think tank the Orrin G. Hatch Foundation[2], Hatch Foundation Executive Director Matt Sandgren was joined by U.S. Senator Cynthia Lummis[3], former Federal Reserve Vice Chair Randal Quarles and Bitstamp[4] CEO Robert Zagotta.
The focus of the conversation was on ensuring that regulations coming out of D.C. wouldn’t hamper the cryptocurrency economy and the innovation happening around Bitcoin.
While there may have been mentioning of “crypto,” a word that is met with some significant pain in the broader Bitcoin community for its implied grouping of BTC with altcoins, the discussion very largely remained centered around Bitcoin itself. Discussion took a very bold (and arguably bullish) direction around the 29-minute mark, when Sandgren posed a question to Lummis.
“Senator Lummis, the Fed currently holds more than $40 billion in foreign currencies on its balance sheet,” Sandgren said. “Why not add bitcoin?”
"I think it’s a great idea, to be honest,” Lummis responded. “Once there is a statutory and regulatory framework, that will make a lot of sense. The fact that it is completely decentralized is going to make it, over time, more ubiquitous. And I think it’s going to be something that the Fed should hold on its balance sheet.”
Adding bitcoin to the balance sheet of an entity such as the Federal Reserve may not only seem unlikely, but even extreme to some. However, let’s not forget that mortgage-backed securities were not added to the Fed’s balance sheet[5] until the 2008 Global Financial Crisis, a move that was intended to be temporary in order to stimulate the economy.
Senator Lummis did a stellar job of discussing how
