Donald Trump’s recent victory in the United States presidential election has opened a discussion: can Bitcoin, a decentralized currency, become an ally to strengthen the US dollar?
This debate focuses on a key promise of his campaign: the creation of a Strategic Bitcoin Reserve.
According to a Report by Zack Shapiropolicy director at the Bitcoin Policy Institute, one of the many benefits it could generate is strengthening the US dollar.
«Although it may seem illogical to strengthen the dollar by investing in bitcoin (a decentralized currency that escapes government control), there are compelling reasons for this idea,” explains Shapiro.
The United States faces significant economic challenges, including a national debt record of 35 billion dollarsas seen in the graph below and a growing concern about long-term financial stability.
United States public debt. Source: FED.
Against this backdrop, the proposal for a strategic national reserve in bitcoin gains strength. By incorporating bitcoin into its reserves, the country would send a clear message, according to the specialist: The United States is committed to fiscal responsibility and innovation.
This would generate greater confidence in the dollar, stabilizing its exchange rate and strengthening its position as a global reserve currencysays Shapiro.
The key role of the Exchange Stabilization Fund
To materialize this idea, the Exchange Stabilization Fund (ESF) is emerging as a “powerful financial tool,” says Shapiro.
“Although often overlooked, (the ESF) is at the disposal of the United States Department of the Treasury, as it could use the ESF to establish a strategic reserve of bitcoin through executive action, without requiring congressional approval. ».
Zack Shapiro, policy director at the Bitcoin Policy Institute.
The ESF was created in 1934, in the midst of the economic crisis of the Great Depression, in response to the need for a flexible financial tool that could stabilize the value of the US dollar.
Current legislation allows the ESF to acquire assets such as gold, currencies or credit instruments. Although bitcoin does not fit directly into these categories, it could be acquired through debt obligations repaid in bitcointhus complying with legal requirements.
“The FSE could purchase debt obligations from qualified counterparties, such as financial institutions or Bitcoin Mining companies, with reimbursement denominated in bitcoin,” indicates the specialist.
This approach would open a door to integrate bitcoin into the US financial system within a regulated framework, details the specialist.
Potential impact on the dollar
According to Shapiro, The integration of bitcoin into US reserves has three key effects:
1. Inflation Protection: With a supply limited to 21 million units, bitcoin is inherently anti-inflationary. Its inclusion would offset the erosion of the value of the dollar in an environment of global inflation, reinforcing the resilience of US reserves.
2. Diversification of assets: bitcoin would complement gold and foreign currencies in reserves. Unlike these assets, bitcoin is not tied to the stability of any economy or subject to geopolitical risks, making it a strategic option.
3. Financial credibility: Adopting bitcoin projects the United States as a leader in the adoption of cutting-edge financial technologies, attracting foreign investments and demonstrating adaptability in the competitive global landscape.
Risks and mitigation
Bitcoin volatility is an “undeniable challenge,” but can be managed with a diversified strategyconsiders Shapiro. This would be with gradual and planned purchases that would allow the Treasury to adapt to market dynamics.
Furthermore, establishing clear regulations would reduce the associated legal and financial risks.
In the long term, bitcoin has a history of appreciation that could generate significant returns for national coffersdemonstrating fiscal sustainability before rating agencies and international lenders.
The financial world is evolving rapidly. Countries like China are developing the digital renminbi (e-CNY or digital yuan), the central bank digital currency (CBDC). How has reported CryptoNoticiasalthough there has been no official launch so far, The tests with the digital currency not only now cover all the provinces of the Asian nationbut have been included in various areas including payments in businesses, payment of salaries and banking services. All this with the aim of challenging the dominance of the dollar.
By adopting bitcoin, the United States It would not only counter these efforts, but also consolidate its position as a global financial leader.. This strategy highlights the need to innovate to maintain competitiveness in a changing global environment.
The proposal to establish a Bitcoin Strategic Reserve could be a milestone in US economic policy. By diversifying its reserves with a decentralized digital asset, the country would not only reinforce the stability of the dollar, but also usher in a new financial era, combining tradition and innovation.
Although the path is full of challenges, the potential of this strategy could redefine the dollar’s role in the global financial future.
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