Can a Centralised USA Coin Be An Alternative to US Bitcoin Reserve? Experts Weigh-In
Well-known Bitcoin critic Peter Schiff has taken a dig at cryptocurrency once again as he proposed the US issue a USA Coin digital currency instead of going for a Bitcoin Reserve.
The gold advocate suggested that the USA Coin might have a circulation supply of 21 million like Bitcoin but it should have blockchain upgradation, making it viable for payments.
Although Peter Schiff is renowned for his anti-crypto stance, this suggestion has triggered a debate on the viability of government-backed digital currency and Bitcoin.
According to the BTC critic, the coin’s utility as a medium of exchange and its scalability as its weaknesses, which could be overcome by issuing USA Coins. The proposed digital asset can deal with these drawbacks by improving blockchain functionality and leveraging the trust of a government-issued currency.
Experts Hail Decentralised Nature of Cryptos
However, crypto experts have rallied behind Bitcoin by calling decentralisation the strength of BTC. They have pointed out how Bitcoin was designed to operate without central control to ensure no entity, government or otherwise can manipulate its policies or supply.
Meanwhile, the proposed centralized USA Coin would be controlled by the US government, making it hard to accept for those who value the crypto market's resistance to inflation and censorship.
Over the years Schiff has forecasted that Bitcoin will lose its edge but the history of the coin tells a different story, especially the recent rally to go above 100,000 this year.
Although Bitcoin has shown significant price volatility yet its long-term growth trajectory has turned it into one of the best-performing assets of the past decade.
Earlier in 2013 and 2017, the Bitcoin critic had predicted that the cryptocurrency will fall to $1,000 and $20,000 levels respectively but it didn't materialise, sparking debate between pro and anti-crypto experts.
A Central Bank Digital Currency More Likely?
If indeed the US creates USA Coin it is likely to have a Central Bank Digital Currency (CBDC) approach rather than a decentralized crypto. CBDCs offer more secure and faster transactions within the framework of existing financial systems but they don't have Bitcoin-like unique features.
Hence, Schiff’s suggestion might stand up for the growing trend of governments looking for digital currencies that they can control. However, the critic’s claims that USA Coin will “make everyone rich” remain to be seen.
His suggestions come at a time when there's a growing interest in government-backed digital assets. As per crypto betting website Polymarket, there is a 33% chance that the Trump administration will create a US Bitcoin reserve by early 2025. . Efforts for this started earlier this year when Senator Cynthia Lummis introduced a bill that mandates the government create a strategic Bitcoin reserve, which gained reaction in the last few months of the US election. Now analysts think it could act as a bullish catalyst for 2025.
The Bitcoin Act of 2024 bill laid down a proposal for a Bitcoin Reserve to lower the $36 trillion national debt of the US government. Matthew Sigek from VanEck revealed that such a reserve could offset 36% of the debt by 2050.
Earlier this year, MicroStrategy founder Michael Saylor asked the US government to go for Bitcoin dumping gold. Schiff has called the US Bitcoin Reserve idea a way of squandering the nation’s wealth.
Similar to Schiff, Castle Island Ventures’ Nic Carter has also opined against a Bitcoin Reserve as it could undermine the US dollar instead of supporting it.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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