Elon Musk has drawn attention to a call to end the Federal Reserve after sharing Utah Senator Mike Lee’s post criticizing the central bank’s independence. Lee’s post highlights growing sentiment among Bitcoin advocates and “sound money” proponents who argue that decentralized financial alternatives like Bitcoin offer protection against currency devaluation.
Musk’s endorsement of Senator Mike Lee’s call to end the Federal Reserve Bank has sparked fresh debate about the U.S. monetary system. Lee’s original post argued for greater presidential oversight of the Federal Reserve, criticizing Chairman Jerome Powell’s refusal to step down, even if requested by President-elect Donald Trump. Lee shared his perspective on social media:
“The Executive Branch should be under the direction of the president. That’s how the Constitution was designed. The Federal Reserve is one of many examples of how we’ve deviated from the Constitution. Yet another reason why we should end the Fed.”
This viewpoint resonates with many “sound money” advocates and Bitcoin enthusiasts who argue that central banks and fiat currencies promote inflation and devalue money over time. Since its inception in 1913, the Federal Reserve has overseen a monetary system in which the U.S. dollar has lost approximately 96% of its purchasing power.
Bitcoin as a Hedge Against Inflation
Amid mounting national debt, now surpassing $35 trillion, Bitcoin has gained traction as an alternative financial asset, valued for its potential to hedge against inflation. Unlike fiat currency, Bitcoin’s supply is capped, leading advocates to argue that it can better preserve purchasing power over time.
In response to concerns over inflation, several lawmakers and state officials have expressed interest in Bitcoin as part of financial planning. For instance, Florida’s Chief Financial Officer Jimmy Patronis has pushed for Florida’s state pension funds to invest in Bitcoin, aiming to shield consumers’ purchasing power from a weakening dollar.
Legislative Support for a Bitcoin Reserve
Interest in Bitcoin has also gained momentum on Capitol Hill. In July 2024, Wyoming Senator Cynthia Lummis introduced the Bitcoin Strategic Reserve bill, citing rising inflation and diminishing purchasing power as key motivations. The bill aims to establish Bitcoin as a strategic reserve, positioning it as a fiscal safeguard against inflationary policies.
Further boosting Bitcoin’s profile, President-elect Donald Trump hinted at the Bitcoin 2024 conference in Nashville that his administration may consider a “strategic Bitcoin stockpile” and even explore the potential of using Bitcoin to address national debt obligations.
