Michael Saylor, the inventor of MicroStrategy, proposes a “strategic bitcoin reserve” sponsored by Trump to establish industry standards for the cryptocurrency space

  • Michael Saylor, the inventor of MicroStrategy, argues in favor of establishing a strategic bitcoin reserve in order to aid in the reduction of the national debt in his paper “Digital Asset Framework,” which was released on Friday.
  • For the larger crypto sector, the paper also makes the case for developing a common taxonomy and set of industry standards.

In a digital asset policy proposal released on Friday, Michael Saylor, the founder of MicroStrategy, has endorsed President-elect Donald Trump’s strategic bitcoin reserve. The so-called “Digital Assets Framework” also outlines a strategy for the United States to encourage the expansion of the industry, provide guidelines for communication and compliance, and grant rights to businesses and holders of cryptocurrency assets.

The United States may take the lead in the global digital economy by defining a precise taxonomy, a valid framework based on rights, and realistic compliance requirements. Digital assets will drive a capital markets renaissance that will empower millions of firms, liberate trillions of dollars in wealth, and establish the US dollar as the cornerstone of the digital financial system of the twenty-first century.

After his company started buying Bitcoin in 2020, Saylor became one of the most well-known supporters of the cryptocurrency, a daring wager that the dollar’s worth would be depleted by U.S. fiscal and monetary policies. With an estimated $42.6 billion in bitcoin, business intelligence software company MicroStrategy is currently the biggest corporate bitcoin holder.

Despite his reputation as a Bitcoin maximalist, who holds that there is an unbridgeable divide between Bitcoin and other blockchains, Saylor’s proposal calls for the establishment of global standards for “digital assets (beyond Bitcoin)” and the bolstering of the US dollar’s dominance as the global reserve currency.

By putting his plan into action—which includes developing a “universal” taxonomy and set of standards—America would become the world’s dominant force in the digital economy of the twenty-first century and pay off its national debt.

Details of the plan

Saylor defines a digital commodity as an asset supported by digital power and devoid of an issuer in his suggested taxonomy. A “digital security” such as tokenized stock or debt, a “digital currency” that is “backed by fiat,” and a “digital token,” which is fungible and useful, are among the assets he categorizes as having an issuer. There are differences between NFTs and tokens that are backed by “physical assets” like gold and oil.

Saylor proposes a “robust framework of rights and responsibilities” that should be applied to issuers, exchanges, and other participants in addition to categorizing various cryptocurrencies. This covers custody, trading, and transferring digital assets in addition to the fundamental rights “to create and issue digital assets.”

Saylor’s recommended duties mostly revolve with making disclosures to the public and abiding by local regulations. No one is entitled to steal, cheat, or lie. Every participant is accountable for their acts, both legally and morally.

He further contends that the expenses of token issuance compliance should be kept to 1% of a company’s assets under management and that maintaining an asset should cost no more than 10 basis points per year in an effort to promote efficiency and creativity. According to him, this might help cut the time it takes to launch a token from years to a few minutes and lower the cost of issuance from $10–100 million to $10–100,000.

Getting rid of the debt

Saylor wants the United States to be at the forefront of the digital economy because he wants the country to continue to be at the forefront of the global economy. He makes an implied case that the U.S. dollar’s hegemonic status—which he has likened to a melting ice cube—must be preserved by becoming the de facto crypto center.

Saylor argues that in order to achieve this, the United States should establish the dollar as the “global reserve digital currency” by expanding the stablecoin market from $25 billion to $10 trillion in market capitalization, which will “create massive demand for US Treasuries.” Additionally, he urges American investors to “capture the majority of the wealth” of the expanding cryptocurrency market.

Last but not least, Saylor supports the establishment of a “strategic bitcoin reserve,” a move backed by a number of American officials, including Sen. Cynthia Lummis and President-elect Donald Trump. Saylor makes the argument that the U.S. Treasury should establish a reserve “capable of creating $16–81 trillion in wealth” — at current prices, that would equate to about 800 million BTC, which is more than the current supply cap of 21 million BTC would allot, at the high end. However, he does not specify how many tokens the Treasury might buy.

Saylor contends that these measures have the potential to eliminate the $36 trillion national debt as determined by the Treasury.

Trump recently came out in favor of creating a bitcoin reserve, despite having pledged throughout his campaign to keep the roughly 198,000 bitcoins that the U.S. government has obtained, mostly through illegal seizures.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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