Steve Hanke’s recent criticism of the idea of a U.S. Strategic Bitcoin Reserve (SBR) has sparked debate once again. In a recent tweet, Hanke argued that converting government savings into bitcoin would not benefit the economy as those savings would not be invested in “real capital assets that produce things.” He further claimed that bitcoin does not contribute to job creation, innovation, or the building of factories.
However, this argument misses the point of what a Strategic Bitcoin Reserve is meant to achieve. The primary purpose of an SBR is not to directly create jobs or drive innovation but to safeguard the economy, hedge against risks, and ensure long-term economic stability. Just as countries hold reserves of gold, oil, food, and weapons for security and stability, a Strategic Bitcoin Reserve would provide a hedge against inflation, dollar debasement, and geopolitical risks.
The current economic landscape is evolving, and holding bitcoin could offer the U.S. a safety net as the world transitions to decentralized money. It is a proactive step towards preparing for the future rather than clinging to traditional economic models. Moreover, a Strategic Bitcoin Reserve could potentially provide the U.S. with leverage if bitcoin becomes the most valuable asset globally, offering a significant geopolitical advantage and strengthening confidence in the U.S. financial system.
Hanke’s critique reflects a misunderstanding of the purpose of reserves, which are essential for risk management and long-term strategic planning. A Strategic Bitcoin Reserve is not a hindrance to the economy but a forward-thinking and innovative approach to adapting to changing times. Dismissing the idea based on outdated arguments is shortsighted.
In conclusion, the concept of a U.S. Strategic Bitcoin Reserve is not foolish, but rather a proactive measure to mitigate risks and position the country for future economic shifts. It is essential to consider the evolving financial landscape and embrace innovative approaches to ensure long-term stability and growth.