If Bitcoin were to become the world’s ultimate reserve, how would global finance, politics, and everything else change? Federal statistics say that as of November 2024, the U.S. national debt is $35.95 trillion. That is the total amount of federal government borrowing outstanding. Right now, the debt-to-GDP ratio is 98%, but the International Monetary Fund (IMF) says it will reach roughly 140% by 2032. That deficit is $1.83 trillion.
In large, government today control of monetary policy. But if Bitcoin goes mainstream, that status will change. Could this be less economic stable?
Bitcoin as a Strategic Reserve Currency 
Thanks to Bitcoin-friendly political leaders, discussions about Bitcoin as the world’s ultimate reserve are gaining traction. Since January, former presidential candidate Vivek Ramaswamy has advised Donald Trump on Bitcoin and digital assets. In a unique step, Ramaswamy proposed backing the dollar with a basket of commodities, including bitcoin, in the future.
Kennedy, Jr. proposed a similar plan based on the idea that a small percentage of US Treasury bills would be ‘backed by hard currency, by gold, silver, platinum or bitcoin.’ Ramaswamy and Kennedy propose curbing inflation by anchoring the dollar to deflationary assets whose value won’t decrease over time.
Thinking Outside the Box
In 1898, a consultant with no shovelling experience went into Bethlehem Steel and expressed an outlandish belief. He remarked, “Your 600 employees are using shovels inappropriately. I can teach them how to do it much better.”
How could someone challenge a practice as fundamental as shovelling? What could be left to discover about moving dirt from one point to another?
Three months later, the managers watched in disbelief as worker output doubled, workers earned 35% more, and company costs dropped significantly. All because Frederick Taylor questioned assumptions that experts had accepted for thousands of years. Taylor went on to write the most influential industrial engineering book of the 19th century.
The Currency with Nine Lives
Bitcoin is a drastic turnaround in the idea of money. What started as an experiment between colleagues has become a multi-billion dollar industry. Bitcoin is a digital currency that aims to eliminate the need for central authorities such as banks or governments. Instead, Bitcoin uses blockchain technology to support peer-to-peer transactions between users on a decentralized network.
The days of Bitcoin being declared dead are officially gone. Although Bitcoin has been proclaimed dead 474 times, each time, it endures. Whether rising from ashes or emerging from each ‘death.’ This November, it inked new records, rising above $87,000.
Some analysts are toying with the idea that Bitcoin could one day shape the global world order and become the de facto reserve currency. Why? Some countries are increasingly concerned about the dollar as the world’s ultimate reserve due to national debt, inflation, and money printing issues.
Under the Weight of $35 Trillion in Debt
As of 2024, the national debt has risen to over $35 trillion. Elon Musk has warned of possible bankruptcy if care is not taken. But how can the U.S. begin to tackle its huge debt pile? Can Bitcoin come to the rescue? Indeed, Trump hinted that the U.S. could potentially wipe off its debt with crypto.
What if savings continued to maintain or even increase their value over the years rather than crumble away to inflation? This could mean people are incentivized to save money rather than spend it, and everyone would be more stable.
De-dollarization in The BRICS Countries
The BRICS countries, including Brazil, Russia, India, China, and South Africa, are de-dollarizing their financial flows. By reducing reliance on the dollar, BRICS nations intend to create a new economic environment supporting projects that enhance their financial sovereignty.
In light of this, the dollar’s share of cross-border bank claims and international debt securities has dropped. Simultaneously, there has been reduced global presence in areas that limit the dollar’s global role.
Some countries voiced concerns when the US started to seize dollar reserves from the Central Bank of Afghanistan following a policy disagreement and cut Russia off from the SWIFT payment system after it invaded Ukraine. The BRICS countries are advocating for a new currency for trade and investment. They have progressed with the initiative, trading in national currencies meant to substitute the dollar.
Advantages of Bitcoin as Ultimate Reserve
A global Bitcoin-based reserve system could completely revolutionize finance owing to its non-inflationary nature. Unlike fiat currencies, where you can always print more money and reduce value, Bitcoin has a fixed supply—21 million Bitcoin and nothing more. This could be scarce because increasing demand can, in theory, create more purchasing power in the future as long as the supply remains short.
In addition, Bitcoin’s status as a virtual currency makes it unavailable for political influence and manipulation. It eliminates the need for financial intermediaries such as central banks or governments.
In Summary
The world as we know it is about to change. With pro-Bitcoin leaders at the helm of affairs in the U.S., many developments will take place to revolutionize the national debt burden. What if Trump can write it off with a crypto check? Just as the US Dollar became the de facto reserve currency of the world after the Bretton Woods agreement, Bitcoin can eventually replace it as the world’s ultimate reserve. However, time will tell.
