BIS and Michael Saylor Agree Bitcoin Isn't Everyday Cash

An Unexpected Meeting of Minds Between Central Bankers and Bitcoin Bulls

Have you ever expected a major central bank and a high-profile Bitcoin investor to agree on anything? It sounds unlikely! Yet, a recent research paper published by the Bank for International Settlements (BIS) shares a surprising conclusion with Strategy co-founder Michael Saylor. Both agree that Bitcoin is not currently functioning as everyday money for buying your morning cup of coffee. However, they reach this exact same conclusion from completely opposite viewpoints.

The Dog Meme and the Search for Pure Money

To understand the debate, let's look at the central bank's perspective first. In a paper titled "Money and the Architecture of Trust," BIS economist Iñaki Aldasoro uses an internet meme featuring a dog to explain monetary history. The meme references Luca Pacioli, the 15th-century Italian mathematician who published the first systematic guide to double-entry bookkeeping.

In the meme, the dog wants "only money" rather than credit or promises to pay. The dog demands gold or Bitcoin because it lacks trust in third parties. It wants a pure asset that is nobody else's financial liability. However, the BIS economist argues that this idea misses how modern economies work. He writes that money cannot exist without trust, calling "money without trust" a contradiction in terms. In his view, money requires credit networks and public backstops to function properly.

Is Bitcoin Currency or Capital?

Central bankers view gold as a monetary protest rather than a usable currency. Aldasoro argues that Bitcoin shares this exact same mindset while adding a modern technological layer. He criticizes Bitcoin's capped supply, claiming that a fixed supply cannot adjust during economic crises or shifting global needs. To support his point, he points to attempts in El Salvador and the Central African Republic to adopt Bitcoin as legal tender, which faced significant hurdles in daily adoption.

On the other side of the discussion is Bitcoin advocate Michael Saylor. His company, Strategy, holds roughly $71 billion worth of Bitcoin based on a firm conviction: Bitcoin is not a daily currency, but rather digital capital. Saylor views digital capital as the foundation for building digital equity and digital credit.

Earlier this year, Saylor proposed a concept called digital money. This would be a dollar-pegged, yield-bearing product built on top of Bitcoin credit and cash equivalents. Instead of spending volatile Bitcoin at a store, people would pay using this digital money. Saylor emphasizes that this is not a rejection of Bitcoin, but a bridge linking traditional fiat finance to the crypto world.

Strategy already offers financial products along these lines, such as STRC, a preferred stock that pays dividends. While STRC is funded by company dividends rather than direct Bitcoin collateral, it demonstrates how corporate entities can structure credit instruments around their balance sheet holdings.

Building a Credit Superstructure on Top of Bitcoin

Despite their differences, both Aldasoro and Saylor describe a remarkably similar structure: a scarce, unbacked base asset anchored at the bottom, with flexible credit floating on top. Aldasoro notes that when gold anchored the monetary system, daily commerce moved through credit instruments while gold remained in vault reserves.

Saylor applies this exact model to Bitcoin, pointing out that gold became far more practical once banks, capital markets, and settlement networks were built around it. Both thinkers also agree that the US dollar remains the world's primary unit of account, with Saylor admitting that Bitcoin has not yet achieved that status globally.

At the same time, both sides caution against the risks of credit expansion. Creating too many paper claims against physical gold or Bitcoin can create systemic instability if debt promises outstrip actual reserves. Nonetheless, a broader credit structure around crypto is taking shape. TD Cowen analyst Lance Vitanza highlighted this trend, noting that discussions are moving beyond simple Bitcoin ownership toward the financial ecosystem emerging around it.

Spotting Double Standards in Central Bank Logic

While the BIS paper offers detailed arguments, it also exposes certain double standards. For example, Aldasoro writes that Bitcoin's value rests entirely on the expectation that others will accept it. Yet, by definition, traditional fiat money relies on that exact same shared expectation.

The BIS paper argues that trust in fiat money is anchored by government institutions and central banks. However, history shows that money usually emerges in private markets long before governments officially recognize it. Furthermore, while the paper claims money without trust is impossible, Bitcoin's design actually replaces reliance on central issuers with decentralized cryptographic code, enabling peer-to-peer verification without central intermediaries.

Without central bank safety nets, private crypto credit layers have faced severe tests. In 2022, crypto lenders Celsius and BlockFi, along with exchange FTX, suffered catastrophic collapses. Addressing these failures at the BTCBTC+2.71% Prague conference, Saylor observed that those businesses fell apart primarily due to poor financial practices and excessive leverage.

Two Opposite Reasons for the Same Conclusion

Ultimately, the BIS economist and Strategy's co-founder reach the same conclusion about Bitcoin not working as daily pocket money, but for opposing reasons. Saylor believes Bitcoin is simply too valuable as capital to spend on small daily purchases. He prefers keeping Bitcoin as a pristine reserve asset while creating tailored financial products above it for different types of investors.

In October, Saylor even outlined a proposal for a Bitcoin-backed stablecoin targeting up to an 8% yield. However, investors should keep in mind that yield-bearing crypto products carry credit and market risks, and historical digital asset returns or past performance do not guarantee future results. Learn more about market trends at Bitkub Market.

Conversely, the BIS economist argues that Bitcoin fails as daily money because it lacks flexibility, central management, and a lender of last resort during panics. While central banks rely on public institutions to spread risk during a crisis, Saylor's model relies on corporate shareholders as the junior tranche absorbing market volatility.

Looking Ahead: What Lies Beyond Today's Debate?

As experts argue from their respective perspectives, Bitcoin technology and its surrounding infrastructure continue to evolve. As Saylor put it, the world does not need everyone pricing daily items in Bitcoin tomorrow for the technology to succeed.

In related central banking developments, payments firm RippleXRP+5.57% confirmed that it is no longer participating in the BIS cross-border payments task force. While questions linger regarding previous research on the XRP Ledger, the financial landscape continues to adapt as traditional banking and digital assets intersect.