Today I am sharing my thoughts on Bitcoin as a candidate for Global Reserve Currency.
The recent high profile failure of Facebook to get the leaders of the U.S. government to approve it’s stable coin Libra, or Diem, highlights the challenges of any currency issued by a private corporation, trust, security of users information and resistance to corruption or the use of said currency by its creators to influence world affairs.
This made me think about who could be trusted to create a global reserve currency.
So I started from the basics; what is money, what is currency and what is a global reserve currency?
Money, Currency and Global Reserve Currency.
Money
Money is a medium of exchange, store of value and unit of account.
Currency
Currency is something that a sovereign nation legally declares is money in their country.
All currency is controlled by the government that issues it and the banks which distribute it, keep track of it and profit from it.
A country which issues a currency can use it’s control over that currency to influence or control it’s citizens.
Global Reserve Currency
The Global reserve currency is the currency of a country, that the worlds richest and most powerful countries have decided will be legally considered money all over the world.
It then becomes the medium of exchange, and unit of account for all international trade. This also means it becomes an international store of value.
This last characteristic is very important as devaluation of the global reserve currency affects trade and commerce globally.
Lastly, being the reserve global currency enriches the country whose currency is the global reserve currency. The US Dollar is the current Global Reserve Currency.
This brings us to our question about Bitcoin being a global reserve currency.
Bitcoin
Bitcoin is a medium of exchange, store of value and unit of account.
Therefore, Bitcoin is performing the functions of money.
Bitcoin is used all over the world as a medium of exchange, store of value and unit of account for international trade. Therefore Bitcoin is functioning as a global currency.
Bitcoin is the most secure money.
Bitcoin is a cryptocurrency issued on a blockchain, which is decentralized, distributed, recorded on a cryptographically locked ledger, which is trustless and verifiable.
Bitcoin cannot be controlled or manipulated by the usual means used on a currency of a sovereign nation by any country.
Bitcoin as the reserve global currency.
I submit to you this thesis for examination and critique:
Bitcoin can fulfill the role of a Global Reserve Currency by providing an internationally accepted money, which could be used for international trade, without the control and manipulation of any other country’s currency.
I think Bitcoin is a good candidate for Global Reserve Currency, what do you think?
@shortsegments
Penned by my hand, February 22th, 2022.
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