Trump Proposes Using Bitcoin to Address National Debt

Concerns over rising inflation in the United States have intensified as the government adds approximately $1 trillion to the national debt every 100 days.

Trump’s Proposal

Former President Donald Trump suggested the possibility of utilizing Bitcoin (BTC) or a “crypto check” as a means to pay off the staggering $35 trillion national debt of the United States in order to avert an impending crisis. In an interview with Maria Bartiromo on Fox News, Trump praised the crypto industry and reinforced his belief that the U.S. must modernize its approach to digital assets to avoid falling behind other nations.

“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.”

This statement highlights Trump’s perspective on Bitcoin’s potential to counteract inflation and provide a stable financial foundation through blockchain technology.

Economic Context

The continuous devaluation of the dollar, driven by increased currency printing to manage existing debts, is contributing to the rising price of Bitcoin in relation to fiat currency. Historical context shows that it took around 200 years for the national debt to reach the $1 trillion mark, while the current rate of debt accumulation is approximately $1 trillion every three months due to excessive spending.

Recent data indicates that in June, about 76% of all income tax revenue was allocated to interest payments on the national debt, making these payments a significant portion of the U.S. federal budget.

Bitcoin, a supply-limited digital asset, has the potential to gradually extract value from the depreciating dollar system, thus preventing a potential collapse akin to the Weimar Republic in the early 20th century. Presidential candidate Robert F. Kennedy Jr. has also suggested that a Bitcoin reserve could facilitate debt repayment as the value of BTC appreciates over time.

Legislative Efforts

Recently, Senator Cynthia Lummis introduced a bill to establish a Bitcoin strategic reserve in the U.S. This initiative aims to mitigate the adverse effects of rampant currency printing and to maintain America’s financial leadership in global markets.

Senator Lummis has proposed that the U.S. Treasury acquire 5% of Bitcoin’s total supply, intending to hold this asset for a minimum of 20 years as a defense against the risks associated with currency devaluation and ineffective fiscal practices.