Senator Cynthia Lummis (R-Wyo.) stated that the United States acquiring more than 5% of Bitcoin’s supply as a strategic reserve could potentially erase the country’s national debt. In a Wednesday podcast with Bitcoin Magazine host Spencer Nichols, Lummis detailed how holding approximately 1 million BTC for 20 years could reduce the national debt, currently over $39 trillion, by one-third to one-half.

Lummis emphasized that acquiring a larger share of the global Bitcoin supply could eliminate the debt entirely. "And if we held even more than 5% of the world's Bitcoin, it could actually erase our debt. So this is an important asset in a buy-and-hold strategy," the cryptocurrency-friendly lawmaker said.

The BITCOIN Act

Lummis has advocated for the BITCOIN Act, a bill proposing the acquisition of 1 million BTC over five years. The legislation suggests leveraging budget-neutral strategies, including Federal Reserve remittances and gold certificate revaluations. While Lummis expressed skepticism about the bill's passage in the Senate, she noted hope for the House version, introduced by Representative Nick Begich (R-AK).

According to on-chain analytics firm Arkham, the U.S. government currently holds 328,352 BTC, worth approximately $20.29 billion. The majority of these holdings were seized from criminal and civil forfeiture proceedings.

Risks and Criticisms

Critics have raised concerns regarding the proposal. Some argue that rotating capital from gold to Bitcoin could depress global gold prices and damage the credibility of U.S. reserves. Additionally, Bitcoin’s volatility remains a significant point of contention, with warnings of sharp price reversals following accumulation phases. The cryptocurrency has previously collapsed nearly 52% from its record highs of $126,198.07 set in October last year.

Regulatory Clarity

Lummis also highlighted the necessity of regulatory clarity for the cryptocurrency sector to prevent innovation from moving outside the U.S. "Digital asset innovation doesn't wait for regulatory clarity. It just moves somewhere else. I refuse to let that keep happening on my watch," she stated. The Senator indicated that the Senate is preparing to move forward with the Clarity Act in July, countering criticism from traditional finance figures like JPMorgan Chase CEO Jamie Dimon.

At the time of writing, BTC was exchanging hands at $60,726.20, down 2.92% in the last 24 hours.

Bitcoin fell to $61,000 as market pressure mounted, though crypto banking pioneer Caitlin Long argued the more significant development is occurring within the U.S. banking system. Speaking on June 23 in a podcast with Scott Melker, Long highlighted Custodia Bank's new Hazel Network initiative, which bridges traditional bank deposits and stablecoins through a single tokenized infrastructure.

Custodia Bank’s Tokenized Infrastructure

Long explained that the Hazel Network allows funds to programmatically change to a GENIUS Act stablecoin when leaving the network perimeter. Unlike traditional stablecoins, the system automatically routes assets back to the originating bank upon return. This mechanism is designed to help community banks retain deposits that might otherwise migrate to external stablecoin issuers.

Long stated that banks are increasingly interested in tokenized deposits due to the clearer legal ownership structures they offer compared to existing stablecoins. She likened the design to an electronic version of a cashier’s check, providing stronger legal certainty for financial institutions. Additionally, the framework embeds compliance and operational controls directly into smart contracts, a feature Long claimed no major stablecoin issuer currently provides.

Market Pressure and Bitcoin Support

Financial markets faced headwinds as tech stocks sold off and South Korean equities triggered circuit breakers. Bitcoin continued to test key support levels during this period. Melker noted growing market sentiment suggesting a potential move toward the $59,000-$60,000 range for Bitcoin. Despite the short-term volatility, panelists maintained that long-term fundamentals for the cryptocurrency remain intact.

Experts observed that market downturns often divert investor attention from structural shifts in crypto and financial infrastructure. "There are short-term stories and there are long-term stories," Tilman remarked, emphasizing the distinction between immediate price action and broader technological adoption.