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This is the latest instalment of the “Bitcoin Policy Hour,” Weekly podcast The Bitcoin Policy Institute, a nonprofit organization that produces the video produced the clip. In it, the BPI’s top members discuss how one policy change by the United States Government could catapult Bitcoin prices to new heights.
Matthew Pines is the Executive Director of the World Bank. He says that the monetary system has been largely unchanged since 1973 when the financial system in the world shifted away from full-fledged central banking. gold standard. “When you think about the monetary system we currently live in,” He said “it’s been around since 1973 and gone through a number of crises and evolutions, but the fundamental structure of it really hasn’t changed.” He pointed out, that as nations like China are emerging as major industrial, financial, and military powers, that the stability of this long-standing, dollar-based, system is being challenged to a degree not seen in many decades.
Head of Policy Zach Shapiro added that concerns about losing trust in the US dollar and its reserve asset—the US Treasury security—have fueled discussions around alternatives. “If you want to talk about what else could be a reserve asset,” He said “gold is an obvious candidate.” Since the United States frozen Russia’s Treasury Reserves last year “there has been a feeling from central banks around the world that treasuries are becoming less of a neutral reserve asset… and so foreign governments have been stacking gold.” That could clear some runway for Bitcoin to replace or supplement gold’s historic role—especially if the Trump administration announces their first Bitcoin buy.
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Asking about longstanding policy idea of “marking gold to market” and using the proceeds to buy Bitcoin, Shapiro explained that formally revaluing America’s statutory gold price—still set by law at around $42 per ounce even though world markets trade gold above $3,200—could generate what he called a “large surplus on Treasury’s books that we could then spend on stuff.” He said that the proceeds of those sales could be directed to Bitcoin. “it would be a one-time trick that adds almost a trillion dollars to our balance sheet on paper. But why are we doing that and why do we think now is the time?”
Pines stressed the implications for global issues. “The gold certificates are a subplot in this larger strategic competitive dynamic,” He referred to the ongoing friction in trade and technological restrictions between China and the US. “When you have the great powers of the world deciding they’re going to up the ante against each other, you’ll see moves in many domains: tariffs, export controls, currency systems, and yes, monetary assets such as gold and Bitcoin.”
Conversation then turned toward a White House executive order issued in March The President’s Working Group for Digital Assets was instructed to send the results of a Bitcoin audit to all agencies. Pines stated that “it literally said Bitcoin is digital gold, is in our strategic interest, and that we need a strategic Bitcoin reserve,” Even though, he said “people outside the US government at first questioned whether that was real or just a campaign promise.”
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Shapiro confirms that the White House has indeed required each agency to determine which digital assets they currently possess from forfeiture, or any other source. “By statute, they had thirty days to do this,” He explained. “But that report goes to the Secretary of the Treasury and the President’s Working Group, not necessarily the public.”
The White House also called for budget-neutral ways to acquire new Bitcoins, but no agency has shown how it will be done. Pines as well Shapiro stated that there were internal government discussions, and confusion over what “budget neutral” This could cause a delay in implementation. “It can’t impact other budget line items,” Shapiro, said “But tariffs, for instance, are not something that costs the American taxpayer money directly, and that’s one way that’s been floated to raise funds for Bitcoin. Selling assets already on the government’s balance sheet is another. That’s budget neutral too.”
According to BPI, if the Trump administration buys Bitcoin in fact, it could have a massive impact on the Bitcoin price. Shapiro stated: “If the United States announces that we are buying a million Bitcoin, that’s just a global seismic shock. I think that really is a big deal. I think first the Bitcoin price goes through the roof. I think we will probably go very quickly to something like a million dollars per Bitcoin.”
Shapiro said that the geopolitical impact could even be greater. “Then you have to wait and see what sort of dominoes fall from that. What are the second order effects of Bitcoin, just being monetized on a faster trajectory than I think a lot of people anticipate. The first is a sort of reaction from other nation states’ reactions […] I suspect that Bitcoin being monetized that strongly and that quickly would have a negative impact on sort of the long-term outlook for gold.”
BTC is currently trading for $83,594.
Featured image was created with DALL.E chart by TradingView.com
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Source: www.newsbtc.com
