President Trump has proposed that the federal government celebrate digital currencies, and some media and policies have retired with serious warnings of the impact on the US dollar. But the reality of Trump’s proposal differs abruptly from the painted by Trump’s hysterical critics. BTC is not a threat to the US dollar and the possession of the US government of BTC or any other digital currencies is not support.
The US dollar still dominates the world, which represents almost 60% of all currency held by the central banks, as of December 2024, according to the IMF. Unlike fiduciary coins, bitcoin and other digital currencies are not governed by any central bank. Therefore, there is no way to have an adverse relationship with the BTC sender, unlike the Chinese yuan emitter or Russian rubles.
Most Forex reserves of the United States are euros and Chinese yuan. But nobody is asking the United States to stop being euros. This is because maintaining a currency in reserve is not a support of that currency. Countries have currency reservations mainly for liquidity purposes, mainly to facilitate foreign trade with counterparts using the other currency. And, since BTC and ETH are the largest digital currencies, the most liquid and the highest volume of USD transactions, it makes sense that the US will hold those coins.
The most important thing, the American Dwar BTC dollar in size. The USD value is more than 1,150x larger than BTC at $ 2,300 billion versus approximately $ 2 billion for BTC. And BTC was classified as the 16th largest foreign currency in the world, measured by USD, from the beginning of 2024. Then, if the United States had 50,000 BTC, it would represent less than 5% of its foreign currency reserve holdings.
In addition, the United States has extensive gold and silver reserves, none of which is used more time as a currency by any important country. There seems to be no risk that these properties in the United States are considered a support of gold as currency, although the United States, in part, they have gold, because it is a good value store.
Critics of digital currencies argue that they do not have an inherent value, but that is like saying that a Picasso does not have an inherent value, apart from the inherent value of dry painting and an old canvas. What a Picasso has is the social value and the value of scarcity: the same sources of value as BTC. Bitcoin’s social value is derived from its objective of fulfilling a role outside the control of governments. Its shortage value acts to support the price of BTC and improves its usefulness as a value store.
There is another reason for the United States to have virtual coins. They represent a great leap in financial technology and is of supreme interest of the United States to be at the forefront of Fintech. It is not only to make the United States the most efficient financial player, but also be better prepared for changes that can come in the future. Blockchain technology has proven to have many uses beyond digital currencies, including the reduction of transaction costs benefiting all consumers.
Therefore, not only Trump’s proposal is based on a solid and consistent economy with the holdings of other foreign currencies, but also gives an impulse to the Fintech sector. He is intelligent and with a vision of the future. Sounds like a double victory for the United States
