Emily Walker
Michael Saylor, the co-founder and chairman of MicroStrategy, has introduced an extensive framework for cryptocurrencies that seeks to integrate Bitcoin and other digital assets more effectively into the US economic landscape.
His proposal was shared on social media last Friday and comes as interest in cryptocurrencies among institutional investors is on the rise. The framework aims to position the US as a frontrunner in the emerging digital economy.
Enhancing the US Dollar with a Crypto Framework
Saylor claims that a properly defined digital asset policy can greatly fortify the US dollar, reduce national debt, and support millions of businesses. He asserts that establishing a clear classification for digital assets will stimulate innovation and could yield trillions in value.
His framework sorts digital assets into several essential categories, including digital commodities like Bitcoin, which possess intrinsic digital value, along with digital securities indicating ownership in stocks and derivatives.
Additional classifications cover digital currencies tied to traditional money, fungible digital tokens offering specific functionalities, unique non-fungible tokens (NFTs), and digital assets linked to tangible commodities like gold or oil.
To validate these assets, Saylor emphasizes the need for a solid framework that clarifies the rights and duties of all market participants.
This system aims to create a secure environment where asset creators are held accountable, exchanges are charged with protecting client assets and ensuring transparency, and asset owners can manage their holdings in accordance with laws.
A core tenet of this framework is that all entities must operate ethically, facing civil and criminal liabilities for their actions.
Reforming Digital Markets and Addressing National Debt
Saylor advocates for a regulatory system that emphasizes efficiency and innovation, avoiding unnecessary bureaucratic obstacles. He suggests standardized disclosures with industry-led compliance that allows exchanges to facilitate effective data gathering and reporting. This strategy could minimize compliance expenses and expedite the process of asset issuance—from months to just days.
Empowering exchanges to offer integrated services for all participants is expected to boost the efficiency of digital transactions, cultivating a more competitive and innovative marketplace.
Looking to the future, Saylor sees a significant opportunity for American capital markets, predicting that an aligned digital asset strategy could unlock trillions in newfound value.
Potential advantages include the swift creation of digital assets, which would significantly lower both time and costs, and broader access to capital markets for countless businesses, making investment opportunities available to many.
Saylor believes that declaring the US dollar as the premier global digital currency could initiate an enormous growth phase in digital currency markets, escalating from $25 billion to roughly $10 trillion.
Moreover, he foresees the global digital capital market skyrocketing from $2 trillion to around $280 trillion, with US investors poised to gain a substantial share of this wealth.
By establishing a strategic Bitcoin reserve, Saylor posits that the US Treasury could amass between $16 trillion to $81 trillion in wealth, offering a practical solution to reduce national debt.
Currently, Bitcoin is trading at $97,360, reflecting a 4% decline over the past week.
Featured image from DALL-E, chart from TradingView.com