Mike Smith
Mar 13
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Andrew Hons, CEO of investment company Newmarket Capital, suggested that the U.S. authorities consider issuing Bit Bonds - government bonds linked to Bitcoin. In his opinion, this will help not only to partially reduce the national debt, but also to create a crypto reserve.
According to the proposed scheme, the U.S. could issue Bitcoin bonds worth $2 trillion, of which 90% would be used to repay debt obligations and the remaining 10% would be used to buy Bitcoin. Thus, if the average price of the asset is $90,000 per coin, the government will be able to purchase about 2.22 million BTC.
Hons sees the economic effect of the initiative in the possible reduction of the debt burden in the long term. He notes that if the current dynamics continue, the Bitcoin exchange rate could grow significantly, and this will allow the government to build up crypto-assets commensurate with the estimated level of federal debt in 2045, which is estimated at $50.8 trillion.
Another benefit is lower debt service costs. While traditional government bonds carry an interest rate of 4.5% per annum, bitcoin bonds can be issued at 1%, according to Hons' calculations. This would save about $554 billion in interest payments over 10 years.
Additionally, Bit Bonds could appeal to investors around the world, offering yields ranging from 7% to 17% per annum. At the same time, the absence of tax withholdings makes such bonds even more attractive.
The only question is whether the authorities are ready to take such an unconventional step. The U.S. financial system is traditionally focused on stable instruments, and Bitcoin, despite its popularity, remains a highly volatile asset. However, the very fact that such proposals are being discussed suggests that cryptocurrencies are becoming increasingly integrated into the economic strategies of major powers.
