A Bank for International Settlements paper and Strategy's Michael Saylor both conclude that bitcoin isn't working as everyday money. They reach that conclusion for opposite reasons: the BIS economist sees a deficient design, while Saylor sees an asset too valuable to spend.
A new BIS paper and Strategy co-founder Michael Saylor agree that bitcoin isn't working as everyday money, according to Bitcoin.com News. Their reasoning points in opposite directions.
BIS economist says money needs trust
In "Money and the Architecture of Trust", BIS economist Iñaki Aldasoro uses a meme of a dog that wants only money, not IOUs, to describe the mindset behind gold and bitcoin. He calls gold a monetary protest and says bitcoin shares that impulse.
The paper also criticizes bitcoin's fixed supply and points to two failed attempts to adopt BTC as legal tender, in El Salvador and the Central African Republic. Aldasoro argues that trust at scale needs public backstops, where the central bank supplies money when no one else will.
According to Aldasoro: "Bitcoin aspires to be money without the architecture that makes money work." He also argues that credit is how money actually works.
Saylor calls bitcoin capital, not currency
Saylor, however, has argued for years that BTC is capital rather than a currency. His firm has stacked roughly $71 billion worth of the asset with that view in mind.
In June, he argued for digital money: a dollar-pegged, yield-paying product built from what he calls bitcoin-backed credit plus fiat cash equivalents, which could work as a medium of exchange. Under that model, people would pay with digital money rather than BTC.
Later, in October, Saylor pitched a BTC-backed stablecoin that would pay up to 8% yield.
Where the two sides overlap and split
Both men appear to describe the same structure: a scarce asset that is nobody's liability at the bottom, with credit on top. Aldasoro applies it only to gold, while Saylor applies it to bitcoin. Both also say the dollar remains the unit of account, and both warn that credit is inherently unstable.
They split on what protects the system in a crisis. In the BIS paper, public backstops do. In Strategy's stack, Saylor says shareholders are the junior tranche that absorbs volatility, with nothing public standing behind them.
Source: Bitcoin News
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