Depth Considerations: Will the US Dollar Really Collapse? Should the US Establish Bitcoin Reserves?

Proponents of BTC reserves are not wrong about BTC's potential long-term strategic role, it's just that the time has not come. This article is based on an article by Christian Catalini and compiled by Foresight News. (Synopsis: Cryption Tsar David Sacks establishes "Trump New Era": is studying BTC reserves, digital assets, stable coins will make the dollar greater) (Background supplement: Trump signed executive order to promote the first sovereign wealth fund in the United States, paving the way for BTC reserves? The United States has long benefited from what economists call "excessive privileges." As the ISSUANCE nation of the world's stock coins, the United States is able to borrow with its own coins and support new spending. However, this does not mean that the United States can print money at will, and Treasuries still have to attract buyers in the open market. Fortunately, U.S. Treasuries are widely regarded as the safest asset in the world, and they are in strong demand, especially in times of crisis, and are a popular safe-haven option for investors. Who benefits from this "excessive privilege"? The first is U.S. policymakers, who have gained additional flexibility in fiscal and coin policy decisions. The second is banks, which are at the heart of global money flows, earning fees and gaining influence. But the real winners are U.S. companies and multinationals that can do business with their own coins and get issuance bonds and borrowing cheaper than their foreign competitors. Then there are consumers, who enjoy greater purchasing power, lower borrowing costs, and more affordable loans. The result? The U.S. is able to borrow at lower costs, sustain higher deficits over the long term, and fend off economic shocks that could put other countries in trouble. However, this "excessive privilege" is not taken for granted, but must be strived for. It depends on the economic, financial, and geopolitical power of the United States. Ultimately, the entire system depends on one key factor: trust. Trust in U.S. institutions, governance, and military power. Most importantly, believe that in the end the dollar will remain the safest place to store global savings. All of this has a direct impact on the Trump administration's proposed BTC reserve. Proponents of BTC reserves are not wrong about BTC's long-term strategic role, it's just that the time has not come. The real opportunity now is not simply to hoard BTC, but to proactively guide BTC into the global financial system to strengthen, rather than weaken, U.S. economic leadership. This means using the dollar to stabilize both coin and BTC, ensuring that the United States leads the next era of financial infrastructure. Before diving into this, let's dissect the role played by the reserve coin and its issuance country. History shows that reserve coins belong to the dominant countries in the world economy and geopolitics. In its heyday, the dominant nation set the rules of trade, finance, and military power, giving it global credibility and trust. From the Portuguese real in the 15th century to the US dollar in the 20th century, the Coinissuance has shaped markets and institutions that other countries have followed suit. But no coin can dominate forever. Overreach, whether through war, costly expansion, or unsustainable social commitments, ultimately erodes credibility. Spain's Balil Silver Coin, once strong with large silver reserves from Latin America, has faded its dominance as Spain's debt continues to mount and its economy is mismanaged. The guilder gradually declined due to the exhaustion of Dutch resources through endless wars. The French franc, which dominated in the 18th and early 19th centuries, weakened under the weight of revolutions, Napoleonic wars, and financial mismanagement. The pound, once the cornerstone of global finance, is gradually dismantling under the weight of postwar debt and the rise of American industry. The lesson of history is clear: economic and military power may create a kind of stockpile, but it is financial stability and institutional leadership that ensure its position. Without these foundations, privileges disappear. Is the dollar's dominance coming to an end? The answer to this question depends on the starting point of time. Around the time of World War II, through the Bretton Woods Agreement, the dollar consolidated its position as the world's reserve coin, and even earlier, when the United States became a major global creditor after World War I. Regardless of the point in time, the dollar has dominated the world economy for more than 80 years. That's a long time by historical standards, but not unprecedented, and the pound also ruled for about a century before its decline. Today, some people believe that the world hegemony of the United States is disintegrating. China's rapid development in artificial intelligence, robotics, electric vehicles and advanced manufacturing marks a shift in power. In addition, China has significant control over critical minerals that are critical to shaping the future. Other warning signs are constantly emerging. a16z co-founder Mark Anderson called the release of DeepSeek's R1 a "AI Sputnik moment" for the U.S., a wake-up call that U.S. leadership in emerging technologies is no longer solid. At the same time, China's expanding military power in the air, sea, and cyberspace, as well as its growing economic clout, raises the urgent question: Is the dollar's dominance threatened? Debt as a percentage of GDP in some major economies. Source: International Exchange Fund The short answer is: not yet. Despite mounting debt and disinformation about the impending collapse of the dollar, the United States is not on the brink of fiscal crisis. Indeed, the debt-to-GDP ratio is high, especially after the surge in spending during the pandemic, but it is still on par with other major economies. What's more, the vast majority of global trade is still conducted in dollars. People's coin is closing the gap with the euro in some international settlements, but it is nowhere near enough to replace the dollar. The real question is not whether the dollar will collapse, it won't. The real concern is whether the United States can maintain its leading position in innovation and economic power. If trust in U.S. institutions erodes, or the U.S. loses its competitive edge in key industries, cracks in the dollar's dominance may begin to emerge. Those betting on the dollar's decline are not only market speculators, but also America's geopolitical rivals. This does not mean that fiscal discipline is irrelevant. It is extremely important. Reducing spending and improving government efficiency through the Department of Government Efficiency (DOGE) or other means would be a welcome shift. Streamlining outdated bureaucracies, removing barriers to entrepreneurship, and promoting innovation and competition would not only cut wasteful public spending, but also strengthen the U.S. economy and strengthen the dollar's position. Coupled with continued U.S. breakthroughs in artificial intelligence, cryptocurrency, robotics, biotechnology, and defense technology, this approach could emulate the U.S. model of regulation and commercialization of the Internet, fuel a new round of economic rise, and ensure that the dollar remains the world's undisputed reserve coin. Can BTC reserves consolidate U.S. financial leadership? This leads to the idea of a BTC strategic reserve. Unlike traditional reserve assets, BTC lacks historical support from state institutions and geopolitical forces, but that's exactly what matters. It represents a new formalization: no state support, no single point of failure, completely globalized and politically neutral. BTC offers an alternative to operating outside the constraints of the TradFi architecture. While many see BTC as a breakthrough in computer science, its true innovation is even more profound: it redefines the way economic activity is coordinated and the way value is transferred across borders. As a Decentralization, trustless system (and its anonymous creator exerts no control), the BTCBlock chain acts as a neutral, universal ledger that is independent.