How Countries Can Embrace the Bitcoin Standard

In a recent discussion with crypto trader Scott Melker, macroeconomics expert Lyn Alden laid out how nations might shift towards adopting Bitcoin (BTC) as a primary financial standard.

This conversation arises amidst the U.S. reaching a staggering $35 trillion in debt.

The idea of a Bitcoin Standard, first proposed by economist Saifedean Ammous in 2018, envisions Bitcoin as a decentralized and market-driven alternative to traditional central banks. Alden proposed several steps countries could take to facilitate this transition:

1. Reserve Allocation: Nations could begin by incorporating Bitcoin into their financial reserves.
2. Support Local Bitcoin Enterprises: Encouraging the development of Bitcoin-related businesses within the country.
3. Legal and Tax Reforms: Making Bitcoin legal tender or at least eliminating taxes on small transactions to promote its use.

Alden pointed out that this transition would be gradual, as Bitcoin’s current market cap is too small to serve as a global reserve currency. However, she believes that ongoing fiscal challenges in the U.S. might drive institutions and governments to start accumulating Bitcoin, which could spur its growth and adoption.

“As the fiscal issues in the U.S. become more apparent, the move towards assets like Bitcoin will likely increase, leading to greater liquidity and readiness for broader use,” Alden concluded.