The US dollar must be backed by a “vibrant” economy to maintain its dominance, says Satoshi’s Whitepaper – the most cited scientist W. Scott Stornetta.
For the year, the US dollar index (DXY) has risen more than 12 percent on high US interest rates and the perception that the US dollar is a safe haven.
However, these factors alone are not enough to maintain the hegemony of the US dollar, said W. Scott Stornetta, a partner at Yugen Partners and the most cited scientist in Satoshi’s 2008 Whitepaper, which laid the foundation for Bitcoin.
“The whole idea of going on defense and trying to strengthen [the dollar]and make sure that no one else becomes the world’s reserve currency, which is completely wrong,” he said, “eighty percent of the effort should be [U.S.] an even more essential economic engine, and then all the benefits that come from it, such as being the world’s reserve currency, follow a natural path.’
Some analysts have said that the United States is interested in maintaining the hegemony of the dollar so that it can dominate world trade, and is therefore eager to eliminate alternative currencies, including Bitcoin.
Stornetta said the U.S. “needs to realize how to take advantage of multiple currencies, rather than seeing it as its sovereign right to declare a medium of exchange, a unit of account, and a store of value.”
Stornetta spoke with David Lin, anchor and producer of Kitco News at the AIBC Summit in Malta.
Money and Competition
The future of money is one of competition, which could challenge its traditional role as “a medium of exchange, a unit of account and a store of value,” Stornetta said.
He also criticized the claim that central bank digital currencies (CBDCs), digital fiat issued by a nation’s central bank, could monopolize the currency system.
“The idea that the current players in nation-state fiat currencies have a monopoly on the system and that simply by adopting blockchain-style solutions for their currencies, all non-state actors will be boxed in, is simply a myth,” he said. “It’s too late in the game to go back to being a closed system.”
Stornetta said blockchain technology would play an important role in defining money in the future, bringing more decentralization and individual control over money.
“The lock is like a money kit,” he noted. “I’d call it a Fed in a box… existing nation-states and their own fiat currencies, cast as CBDCs [central bank digital currencies]they will have to compete on their own merits with other alternative currencies.”
For Stornetta’s vision for the future of Bitcoin, watch the video above
Follow David Lin on Twitter: @davidlin_TV
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