Even during the ladder time, the United States faces great financial challenges similar to the challenges of the crisis. Her national debts are rising, and bond markets show signs of fragility. The doubling of these issues is a political environment where the consensus on financial solutions remains far away.
In a conversation with Beincrypto, Matthew Pines, CEO of the Bitcoin Policy Institute, argued that Bitcoin, or BitBonds, can provide an alternative solution that reduces interest rates and reduces the financial burden without any additional cost of the American tax motivation.
The American debt crisis escalated
The United States faces great financial pressure, as its national debt is about $ 36.2 trillion.
The exacerbation of this is already in relation to the number is the historically high interest rates on government bonds, as the treasury revenue for 10 years fluctuates about 4.3 %, while the treasury return for 30 years rises higher rates.
These percentages offer a certain dilemma, as the government is preparing to re-financing a large part of its debt, which was issued at much lower interest rates during the Covid-19s.
If new debts are released at the current prevailing rates, they will inevitably celebrate the burden of interest to a large extent for American taxpayers in the future, which exacerbates the nation’s financial strain.
Despite the disturbing state of the health of the economy, the rhetoric related to the mitigation of the issue before it is noticeably limited to control. In the encryption community, the alternative solution that might deserve to try to float around.
Chronic financial defect
The United States struggle with its financial deficit is far from new. For decades, the nation has spent more frequently than gathering, and the national debt accumulated constantly.
Despite its spread, most of the governments that were installed inside and outside the authority did not do much to change the course of this long reality.
“We are in a good economy at the present time. We have a decrease in unemployment and moderate inflation, however the government’s financial situation is as if we were fighting a war. It has returned to the levels of Kofid almost. This is a sign of the presence of basic diseases in the general budget structure of the federal government,” said Pines Pinz Pinkerpo.
While the basic economic approach to addressing the massive American financial deficit would indicate a tougher spending and more production, the implementation of such measures faces major political obstacles.
“If we live in an ideal world, the government will be able to balance its budget and will be able to separate politically in the difficult bars associated with cutting off government programs, which politically is not very palatable. But even in times of relatively high power, the government rarely collects more than 20 % of GDP in tax receipts.
This financial pressure is not just an internal economic problem, but it reflects the broader global transformations that deepen a really clear struggle.
Geopolitical pressures and “unconventional” solutions
China has long been the main competition of the United States. However, their competitor is now more intense than ever. This is especially true in major fields such as economic growth, race for artificial intelligence dominance, and manufacturing power.
According to Pines, China holds many means that may disrupt the progress of the United States.
He said: “We are in a geopolitical environment where our opponents, China in particular, enjoy a lot of our supply chains, and rare land … and they have now climbed the value chain in terms of competitive manufacturing,” adding, “They can mislead through the supply chain problems.”
This mixture of pressure can be sufficient for the United States to request solutions that go beyond traditional economic policies.
“I think we are at the point we have to think about unconventional ways to help us,” Pines.
Given that the current administration has shown a special openness to digital assets, Bitcoin has provided a solution to the problems of the United States.
What are the bitbonds improved tank bonds?
In March, Pines issued a brief policy, co -authored with his colleague at the Bitco Policy Institute Andrew Hohns on the implementation of the bitcoin improved treasury, or BitBonds for a short period.
This initiative depends on the foundation concept of the Bitcoin Strategic Reserve (SBR), which has gained power towards a modern executive order that creates a stock of bitcoin and other digital assets.
“The Trump administration … mainly (committed) not to sell the bitcoin that he is already carried in his possession, then (the direction) of the Treasury and the Minister of Commerce to determine the tax methods, its quotation,
Bitbonds may be one way to achieve the latter.
BitBond methodology
BitBonds is mainly regular treasury bonds, but instead of allocating 100 % of bond returns for traditional government financing operations, a part will be allocated to the purchase of Bitcoin. How long will it depend on what the federal government decides.
Pines and Hohns 10 % suggested for simplicity, but Pines made it clear that the small start may be less than 1 %.
“The government sells, for example, a billion dollars of a 10 -year bond, and it takes 10 % of the revenues that may go to finance government operations, and puts half of that in SBR for the government to keep it indefinitely,” Basically, buy a guaranteed distribution of a fixed amount of bitcoin over the age of the bond. “
These measures are also for discussion. The federal government may decide to use all 10 % to buy bitcoin, or all can go to bond holders.
Regardless, the central idea of ​​such a bond is to integrate some high fluctuations in Bitcoin and the high aspects of the return in the US Treasury’s profile.
The ultimate goal will be to reduce interest rates and use bitcoin price estimate to start paying debt.
Double Benefits: Reducing Bitcoin rates
The current interest rates that affect the cabinet holders, to some extent, commit their future.
If the federal government is forced to issue new debts at higher interest rates today to pay the debt due, taxpayers will be responsible for paying the most benefits much on national debt in the future. As a result, the demand for debt decreases.
“If there is a possible way to increase the demand for debts that reduces the interest rate that the government must pay, well, it would save a large amount of money,” said Pines Beincrypto.
BitBonds may stimulate the demand for US debt by submitting Bitcoin.
“In historically, Bitcoin had a very less than very positive estimate. Therefore, there is (it is) a way to organize a security tool that takes some fixed income, low fluctuation, low -risk aspects of traditional bonds, especially the government’s bonds, and merged into a little high erosion, and high -return aspects of Bitcoin, clarify the” border. “
This increasing demand, in turn, will allow the government to issue a bond at a lower interest rate.
If Bitcoin continues to be estimated over time through BitBond Up and its operation, the Pines believes that a meaningful part of the financial position of the United States government can be resolved.
The government’s participation will also create a profound psychological impact on the market.
Bitcoin removal by supporting the government
BitBond will require the government to make large biocoin purchases. Although major companies and bitcoin treasury companies are often performing major acquisitions, the United States does it will be huge. It will exceed the current precedent.
PINES emphasized that the basic effect will not only stem from the size of the direct purchase, but from a deeper transformation of perception.
“It will really be to support the government, saying they will do something like this. This may change the future expectations for Bitcoin significantly, much more than a billion dollars of purchases,” Pines told Beincrypto.
He has made it clear that this government embrace will work to “remove risks” in the eyes of the broader market. He pointed out that bitcoin is often seen by extreme bilateral results – it reaches zero or becomes a valuable global store.
By referring to the long -term feasibility and legitimacy, the strategic adoption of the United States government will actually reduce the possibility of a “go to zero” scenario.
Moreover, Pines, along with a unique aspect of the government’s position, described it as a “reflexive influence”:
“One of the things that the government can do and no source of debt can do otherwise, if she buys Bitcoin as part of this debt version, Bitcoin will rise. And if it already has part of its bonds, it can already generate reflexes that almost no other source can do.”
However, the question remains how bond holders can protect themselves from bitcoin fluctuations if its price decreases significantly.
Reducing bitcoin volatility for investors
Bitcoin fluctuations significantly affect the bond holder depends on its appetite for risks. Selling speculative bonds before they reach the stage of ripening by nature. This scenario is standard for any bond.
However, for bond holders looking for stability, the negative consequences of the bitbond contract until they reach maturity are unparalleled. The money that is initially invested is guaranteed to be returned by the United States.
“The way we create, that the risk of the negative side is mainly crowned equivalent to buying an ordinary bond. Therefore, in the worst scenario, you can only get what is the ordinary treasury security for 10 years, and do not get the gains that you think you will get from Bitcoin did not do anything,” explained PINES.
Even if Bitcoin is disrupted, the BitBond design guarantees the minimum return or main protection. If it rises, the investor’s capital is estimated.
A gradual approach to an unprecedented idea
The implementation of an unprecedented concept like BitBonds in a traditional American financial framework represents a unique set of challenges.
Despite the convincing arguments of Bitbonds, Pines admits that such an unprecedented idea will require a cautious and gradual approach.
He said: “We seriously recommend the government to explore this idea, and start small with a experimental program, test the market, and know how it will circulate, then we see how successful it is over time.”
Pines also explained that Bitbonds aims not to disrupt the current financial system, but rather as a supplementary tool.
While BitBonds’s implementation may be slow due to bureaucratic processes and the need for a comprehensive study, the concept provides a unique opportunity to face urgent financial challenges in the country.
Disintegration
With the guidance of the confidence project, this article displays the views and views of industry or individuals experts. Beincrypto is devoted to transparent reports, but the opinions expressed in this article do not necessarily reflect the views of Beincrypto or their employees. Readers must independently verify information and consult with a professional before making decisions based on this content. Please note that the terms, conditions, privacy policy have been updated and the evacuation of responsibility.
https://beincrypto.com/wp-content/uploads/2024/02/bic_US_Dollar_4-covers_neutral.jpg.optimal.jpg
2025-06-25 16:00:00
