Forbes: 3 reasons why America needs to embrace Bitcoin

Author: Sean Stein Smith, Professor at Lehman College, City University of York Source: forbes Translation: Shan Ouba, Golden Finance

It’s no secret that the world of Bitcoin and other crypto-assets in the United States has been rife with controversy and debate. From initially being derided by nearly every traditional financial institution in the U.S. to now 11 spot Bitcoin ETFs quickly attracting billions of dollars in funding since their inception, it’s clear that theU.S. private sector has embraced Bitcoin and tokenized payments . These institutions include BlackRock, the world’s largest asset manager, and JPMorgan Chase, the largest and most influential bank in the United States. Meanwhile, Bitcoin investment continues to hit new highs, and other indicators continue to point to greater interest in the crypto space, such as the market cap of stablecoins and the resurgence of the NFT space.

Despite these positive trends, news, and indicators from the private sector, resistance from U.S. policymakers has been fierce. The U.S. Securities and Exchange Commission (SEC) continues its push to classify nearly all crypto assets as securities, filing a lawsuit against SEC-registered exchange Coinbase, while also launching a new lawsuit against organizations doing business with the Ethereum Foundation. investigation. Furthermore, despite the apparent success of Bitcoin and other tokenized assets, debate among politicians continues. Elizabeth Warren remains one of the most vehemently anti-cryptocurrency politicians in the United States, with her stance strengthening as the White House recently revived a potential 30% tax on Bitcoin miners.

This division cannot continue and is completely detrimental to rational dialogue around these technologies that promise to reshape the future of money and commerce.

1. The U.S. dollar has been digitized

According to a study by the Federal Reserve Bank of San Francisco, only 19% of total USD transactions and 6% of USD transaction value were conducted using cash. Whatever metric is used to measure the digital transformation of U.S. dollar transactions, the reality is clear: the U.S. dollar has gone digital. This is not to dismiss the debate surrounding central bank digital currencies (CBDC), with both sides raising legitimate concerns that need to be addressed in a constructive manner.

However, the debate surrounding CBDC may obscure the fact that transactions between businesses and individuals have become increasingly digital/virtual in nature. From this perspective, it seems logical to conclude that as tokenized payments and blockchain-based transactions continue to increase in frequency and value, these technologies will become part of U.S. dollar transactions.

So far, household names including JPMorgan Chase and PayPal have launched tokenized payment products and stablecoins respectively for internal use; and Fighting these trends seems short-sighted.

2. Money is technology

Based on the first point, it is increasingly obvious that , money is no longer a currency (not to mention the obsolescence of physical units), but more like a technology. As digitization accelerates in every aspect of the global economy, whether driven by blockchain or other technologies, currencies are turning to another technology application. With digital and virtual trading accounting for an ever-larger share of total trading volume and value, and the tokenization of TradFi assets well underway (led by the TradFi agency), the line between currency and technology is almost invisible. missing.

These trends don’t even touch on the important role that digital and tokenized transactions will play as video games, streaming content, and augmented reality continue to become mainstream. The Metaverse may have been overhyped at first, but AR and VR continue to improve and represent a near-ideal use case for tokenization/tech currency.

The United States has long been a hotbed of technological innovation, and ignoring the evolution of currency will harm the development of consumers and businesses.

3. Reserve status is not a right

Through the role of the US dollar as the global reserve currency , America enjoys one of the most luxurious privileges any country can experience. The U.S. dollar has been the backbone of financial transactions and global markets for nearly 70 years, and it’s almost impossible to imagine a world where this isn’t the case. Difficult, but this mentality ignores historical precedent; multiple countries and empires have held global reserve currencies in the past, and the United States is just one of many whose currencies have maintained this status.

As the challenges facing the U.S. economic and geopolitical strategies continue to emerge and rise, coupled with the digitization of U.S. dollar transactions and the continuous strengthening of the technological nation, the reserve currency of the U.S. dollar Status should not be taken for granted. Instead, policymakers should build on private market efforts to incorporate tokenization, embrace the digitization of the dollar, and actively invest in the currency’s technological future.

Rather than buck the trend, U.S. policymakers should follow the private sector’s example and embrace Bitcoin and other crypto-assets.