21 sats \ 4 replies \ @Undisciplined OP 11 Aug \ parent \ on: Should the US Government Acquire a Bitcoin Reserve? • Listen on Fountain bitcoin
Maybe, but that logic cuts both ways. If the dollar is "backed" by bitcoin to some extent, then that lessens the need to get away from the dollar.
Take it to the extreme where the US buys enough bitcoin to fully back the dollar with 100% bitcoin reserves. Why would other countries ditch the dollar, in that case?
There is no proposal to enable conversion of the USD into Sats. There was once the right to convert USD to gold.
Any proposal short of enabling conversion of dollars to Sats is an admission that Bitcoin is a superior SoV to USD...and thus accelerates devaluation of the USD.
The only thing supporting the USD for decades has been the need of other Central Banks to hold USDs for access to SWIFT and as reserves. If the USD declares it now sees BTC as a superior SoV the USD would very swiftly, collapse.
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My point is that if holding some bitcoin would accelerate the dollar's decline, then holding even more should be worse. However, if we go far enough, it seems clear that it would do the opposite and actually inspire confidence in the dollar.
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If you were to go to the extent of making the dollar redeemable for Bitcoin you are then admitting Bitcoin is a more secure and reliable SoV than the USD...
ie that the dollar needs such backing to maintain trust and faith in it.
Such an admission would undermine the dollar as its current status depends upon it being seen as a strong, reliable and highly liquid SoV.
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Who cares about "admitting" anything? Such a backing would clearly make it a stronger currency, given your other assumptions.
The rest of the world, if they see Bitcoin as a superior store of value, is not going to abandon the dollar because it's got too much Bitcoin backing it.
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