The Push for Bitcoin in U.S. Government Retirement Plans is Here
In an interview at the CNBC Financial Advisor Summit, US Senator Cynthia Lummis expressed her desire for Bitcoin to play an important role in government retirement funds. She spoke about Bitcoin’s significance as a store of value, and her worries about the US dollar getting destabilized at some point in the future. This is not the first time Bitcoin has been mentioned in this context, as some retirement plans already take advantage of BTC.
Diversifying Retirement Portfolios
Cynthia Lummis, US Senator for Wyoming, spoke with Ylan Q. Mui, CNBC’s Senior Congressional Correspondent, where she explained her thoughts on the current state of the US economy. In particular, she focused on retirement plans, urging the government to keep Bitcoin in mind.
In the interview, she explained:
“I would like to see cryptocurrency, like Bitcoin, become part of a diversified asset allocation that are used in retirement funds and other opportunities for people to save for the future. So whether you’re an employee that has a retirement fund – I’d like to see those retirement funds invested in bitcoin and other cryptocurrencies that are good stores of value – but I’d also like to see individuals be able to use bitcoin and cryptocurrencies of their preference that are safe, that have met the hurdles of anti-money laundering and Bank Secrecy Act.”
Her reasoning for this is not simply because Bitcoin has performed well over the last decade, but due to its limited existence, as well as its algorithmic means of distributing more into circulation. On that point she said:
“Since there’s only going to be 21 million bitcoin ever mined, it’s a good store of value because it has defined scarcity. And the way that it was set up, so it unlocked some bitcoin every 10 minutes, fewer and fewer over time until all 21 million have been produced, it’s easy to see, conceptually, why it’s such a good store of value”.
Senator Lummis is not the only government official calling for Bitcoin investments. In April, the San Francisco Deputy Sherif’s Association (SFDSA) revealed they had added Bitcoin to their investment portfolio. Although not explicitly stated by the SFDSA, it is expected that these investments will go towards pensions.
This is significant because police retirement funds are often extremely careful and conservative about what they invest in. If they have bought Bitcoin, it means they do not view it as too much of a gamble or a risk.
The US Dollar is Scaring Investors
Not only does Senator Cynthia Lummis speak highly of Bitcoin, but she also expressed fears about the future of the dollar. She stated:
“As the Congress spends trillions and trillions of dollars, and is flooding our economy and the world economy with U.S. dollars, there’s no way that we cannot debase the value of the U.S. dollar. So, I worry about having all of our retirement monies denominated in U.S. dollars. So as part of diversification, having a very diverse asset allocation, so you don’t have all your eggs in one basket”.
This is becoming a common thought among US investors. The Federal Reserve has brought fear to economists and speculators via its stimulus plans, causing places like Deutsche Bank to worry that uncontrollable inflation might ravage the country. It is even possible that this has already begun, as the Consumer Price Index for All Urban Consumers (or CPI-U) is showing similar patterns to the 2008 financial crisis.
Senator Lummis is not only promoting Bitcoin for investments, but she is discouraging people’s reliance on the US dollar. This makes sense, as the 2008 financial crisis caused pension funds to collapse and diminish in value, affecting the oldest and most vulnerable members of society. If we are entering (or already in) another recession, then it is wise to look towards external means of protecting retirement funds.
It is possible that Bitcoin will become a common element within most investment funds in the months and years to come. This is especially true if people are concerned about what will happen to pensions, should there be another economic collapse. In this sense, Bitcoin acts as a hedge against financial uncertainty.
Do you think Bitcoin should be a part of most people’s retirement plans? Let us know in the comments below.