Michael Saylor, the Executive Chairman of Strategy, the world’s largest corporate holder of bitcoin, has once again articulated grand ambitions for the cryptocurrency’s role in the global financial system.
Speaking at the Bitcoin MENA event in Abu Dhabi, he called on nations to build digital banking systems fully backed by bitcoin reserves. According to Saylor, such high-yield, low-volatility accounts could attract enormous amounts of capital: “$20 trillion to $50 trillion,” the multimillionaire claimed.
Why Saylor Thinks Countries Should Do This #
In his speech, Saylor highlighted the significant gap between current savings rates and returns in alternative markets. In many countries, such as Japan, Switzerland, and parts of Europe, bank deposits yield almost nothing.
Money market funds perform slightly better, with U.S. variants offering around four percent. But for Saylor, that’s still too little. He observes that investors are therefore turning to corporate bonds, which “wouldn’t exist if people weren’t so disgusted with their bank accounts.”
His idea is for countries to create funds consisting of approximately 80% digital credit instruments, combined with 20% fiat and an additional 10% buffer. This structure, he argues, would be stable enough to offer consumers an attractive return while simultaneously managing the volatility of bitcoin.
A Bitcoin-Backed Account #
Saylor outlined a model where the digital credit layer is supported by bitcoin, with five times the necessary collateral. This is intended to ensure that fluctuations in the bitcoin price do not directly lead to risks for depositors. If countries were to offer this through regulated banks, “deposits could flow into such institutions by the billions.”
On X, Saylor reiterated his confidence in bitcoin following his speech. Strategy purchased another 10,624 bitcoin last week, worth nearly $963 million. The company now holds 660,624 bitcoin, more than any other publicly traded company in the world.
Too Much Risk #
However, not all market experts are enthusiastic. Bitcoin’s recent volatility, currently about 28% below its all-time high, raises doubts about the feasibility of products that promise a stable return. Former trader Josh Man previously said that Saylor’s idea is “crazy” and that STRC, Strategy’s own bitcoin-backed preferred stock, could be vulnerable:
“Walking rates on STRC to maintain/defend a peg or price level is not going to work when depositors want their money back.”
Meanwhile, Saylor remains undeterred, continuing with his strategy. He believes there is a high probability that the first country to embrace this model will become the “digital banking capital of the world.”