Cynthia Lummis was the U.S. Representative for Wyoming from 2009 to 2017, and is now running for U.S. Senate. A budget hawk and founding member of the Freedom Caucus, she first bought bitcoin in 2013 after a tip from her son-in-law. She’s been an advocate ever since.
A rancher with sandy blonde hair and a warm chuckle, Lummis spoke over the phone while she was looking out her window at hundreds of heads of steer. Birds were chirping in the background. We discussed what is a good store-of-value, how she thinks about her digital assets and running a senate campaign in the midst of a pandemic. “Each of those cattle,” she said, pointing outside, “they’ve decreased by over $400 a piece because of coronavirus. We need stores of value that are decoupled from the economy.”
This interview has been edited for length and clarity.
BP: Wyoming is leading the country in integrating blockchain technology and cryptocurrencies into its banking and regulatory frameworks. What interested you in these technologies to begin with?
CL: I served eight years as Wyoming state treasurer and so I got to invest Wyoming’s Permanent Mineral Trust Fund. It’s essentially a sovereign wealth fund. I was always trying to do was find something that was a good store-of-value. Largely through my son in law Will Cole and his friends I learned about bitcoin as a store-of-value. I bought my first bitcoin in 2013.
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BP: Wow, so a pretty good time to do so.
CL: Oh my god, yes, I think it was about $320 for a bitcoin that time. I’ve watched it mature as a store-of-value. I’ve watched the fundamentals of Bitcoin play out as something that has scarcity built into it, with only 21 million bitcoin being issued. That scarcity, which under economic theory should store value, has done so. The more I watched it since originally buying, the more I’ve come to believe that those overarching economic principles that underlie Bitcoin are playing out the way that one would hope and expect they would. As a person who’s always looking for a store-of-value, I’m impressed with that.
I’m a budget, debt, and deficit hawk. I’ve watched us print money and avoid the scarcity principle by printing more and more money and watching the value of the dollar decline as a result of that. Alternatives to fiat currency are ready for primetime. This is the 21st century. Fiat currency may be on the decline, and I believe that cryptocurrencies may be on the uptick. We were seeing that dynamic play out more quickly because of coronavirus.
As long as a dollar-based digital currency is backed by the full faith and credit of the U.S, as opposed to something more scarce, I don’t think it can add value.
BP: As China moves ahead with a digital yuan, should the U.S. be pursuing a digital dollar so we aren’t falling behind?
CL: I don’t know that a government-issued currency is going to be necessary. As long as a dollar-based digital currency is backed by the full faith and credit of the U.S., as opposed to something more scarce, then I don’t think it can add value. But maybe the goal of a digital dollar is not to store value but a matter of convenience, and it’s a matter of avoiding the ridiculous fees associated with having a non-digital fiat based currency. So, there may be consumer benefits to having a digital dollar that I have not fully explored.
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BP: How viable are blockchain and cryptocurrencies as issues for a candidate’s platform today? I noticed they weren’t mentioned on your website.
CL: I have not talked about them as much as I think about them. That needs to change. The Wyoming legislature has been so advanced in its thinking about these issues. People like Caitlin Long, Will Cole and Parker Lewis are furthering Wyoming’s embrace of digital and cryptocurrency platforms. We are in this unique position. I need to talk about it more because these areas are going to become an important component of Wyoming’s contribution to advancing a whole variety of technologies that will set us free going forward.
BP: I was in South Carolina covering the primary before the pandemic and many people I spoke to said they wanted to hear the candidates plans and thoughts on issues like cryptocurrencies. How would engage on this in Washington?
CL: I would hope that I can be part of that in the U.S. Senate and find allies and other people who are interested. I don’t know how many members of the Senate are as pessimistic as I am about the future of fiat currency. That will be something I want to explore with members of the Senate when I get there and find out if not, then why not.
Why do you think we can keep raising the debt ceiling and printing money without it having an effect on the value of the U.S. dollar and its ability to protect people?
My generation, the Baby Boomers, are going into retirement, only to see their life savings become less valuable every day. Isn’t it better to acknowledge that circumstances within our control, meaning overspending, followed by a coronavirus that resulted in overspending by necessity, has now put us into such a deep hole that we need to explore alternatives to fiat currency?
BP: The idea of a digital dollar was raised briefly in the context of the stimulus bill to send money directly to Americans. Would you have preferred to see an approach like that to get money to people quickly?
CL: I don’t have any criticism of how the President and Congress handled this rapid response to the coronavirus. They truly didn’t have time to create the architecture for efficient distribution of these payments digitally. If that architectural framework had been in existence prior to this crisis, we would have been in a different situation. So now that we have the benefit of hindsight, creating that architecture as a means to more efficiently address crises and the delivery of benefits via the social safety net really may be one of the silver linings of having gone through this.
BP: So did you hold on to that first bitcoin?
CL: Yes, I am a HODLer. I’ve never sold. I was and am a buyer. I feel like that will always be the case for me. Because, going back to my store-of-value means of investing and diversifying, I want to have a diversified asset allocation. I want some assets that produce no income to me, but I can hold as a store-of-value. For someone my age who has other investments that are more vulnerable to our current economy I am delighted to have one that seems a little bit decoupled from our current economy.
Looking at my own day-to-day business as a rancher and seeing how coronavirus affected my role in the traditional economy, I want to find ways in the non-traditional economy to protect my personal future and that of other Americans.
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