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Can You Reduce the State Debt with Bitcoin?
As the CEO of CryptoQuant, Ki Young Ju has spoken out about the possibility of using Bitcoin to reduce government debt. According to him, it is theoretically possible for a country like the United States to create a strategic Bitcoin reserve and use it to pay off part of its massive national debt.
In his proposal, he suggests that if the US government were to buy 1 million BTC by 2050, it could potentially offset up to 36% of the country’s total debt. This would mean that the remaining 30% held by foreign creditors might resist such a move, but this is not the goal of the strategy. The idea is more practical and focused on reducing the burden of debt.
However, Ki Young Ju also emphasized the need for international agreement and cooperation to make such an initiative successful. He pointed out that achieving consensus among lenders could be challenging due to Bitcoin’s volatility compared to traditional assets like gold or dollars.
Furthermore, he noted that Bitcoin must gain global recognition and reputation equal to that of gold in order to achieve widespread acceptance. The establishment of a strategic Bitcoin reserve would be a crucial step towards this goal.
The CEO also highlighted the potential risks associated with such an initiative, including the possibility that long-term Bitcoin holders (“whales”) could liquidate large amounts of their holdings, potentially undermining the strategy. Nevertheless, he expressed confidence that even these whales would hesitate to sell in the face of a rising Bitcoin price and government-backed support.
Michael Saylor, CEO of MicroStrategy, has also weighed in on the topic, stating that the US could potentially earn 81 billion dollars by creating such a strategic reserve.
The idea may seem far-fetched to some, but it’s not without precedent. In fact, countries like the Central African Republic and El Salvador have already made significant investments in Bitcoin.
While this concept is still purely theoretical, it remains an interesting thought experiment that could potentially reshape the global financial landscape.
Stay tuned for further updates on this topic!
Source: www.bitcoinbazis.hu
