Peter Schiff, a prominent supporter of Gold and a critic of Bitcoin, has presented a controversial idea of introducing a government-backed cryptocurrency instead of creating a Bitcoin strategic reserve.
Schiff considers Bitcoin a “national security threat” and recently warned that Bitcoin could undermine the US dollar. Yesterday he suggested that the US government could save a lot of finances by creating a cryptocurrency called USAcoin rather than investing in Bitcoin.
He proposed capping the USAcoin to the maximum supply of 21 million coins to make it scarce just like Bitcoin and create more use cases on it. He, however, said the digital asset would need to have an upgrade from blockchain technology to make it viable for issuing and settling payments. The financial commentator said through this approach, America will get rich.
In another tweet later, Schiff disclosed that somebody has already created USAcoin. He urged people not to buy the token because it is not a government-sponsored cryptocurrency he had recommended earlier.
Someone actually created a #USAcoin. My post was sarcastic—don't buy it. However, my point was that if the U.S. government created such a token and committed to building a strategic USAcoin reserve, it would make more sense than stockpiling #Bitcoin. That part wasn't a joke.
— Peter Schiff (@PeterSchiff) December 22, 2024
What is the USAcoin?
According to CoinGecko, the USAcoin was launched yesterday. But the most interesting thing is that the creator is anonymous. So far the token has explosively surged its value following Schiff’s comments on social media. The coin is currently up 68.3%, trading at $0.121 in the last 24 hours. Its highest price was $1.27, recorded on Dec. 22, 2024 (about 19 hours).
As per CoinMarketCap, USAcoin is a utility and ERC-20 governance token that crypto enthusiasts can use within the American ecosystem to interact with Web2 and Web3 applications.
USAcoin holders can get rewards from NFT collections, DeFi yield farming, staking, liquidity pools, and DAOS. The USAcoin DAO allows token holders to participate in the decision-making processes within the USAcoin ecosystem and gives holders the voting rights to decide on the DAO’s future directions.
USAcoin ecosystem said it is entirely community-driven and grants token holders exclusive rights to club benefits, alpha groups, whitelists, and access to various network opportunities.
USAcoin has a maximum supply of 100 million tokens and cannot mint any further tokens. It was launched on the Ethereum blockchain.
The role of Bitcoin strategic reserve
Early this year, Senator Cynthia Lummis tabled a bill that would require the national government to set up a Bitcoin strategic reserve. The seemingly ridiculous idea has been garnering user interest over the past few months. In July, President-elect Donald Trump announced plans to develop a US Bitcoin strategic reserve. Recently, Microstrategy cofounder Michael Saylor suggested the US government abandon Gold and replace it with Bitcoin in its reserves. Recently Peter Schiff opposed the creation of a Bitcoin reserve, arguing that such an approach could consume the nation’s wealth.
A strategic reserve is a stock of an important reserve that can be given out during times of crisis. A good example is the US Petroleum Strategic Reserve, which was established by statute law in Congress in 1975. Presidents have used the stockpile to address oil crises during war or when windstorms destroy oil infrastructure across the country.
Some legal experts and financial analysts think that President Trump would create the Bitcoin strategic reserve using the above approach. Others also believe that Trump could develop the reserve through an executive order commanding the U.S. Treasury’s Exchange Stabilization Fund to be utilized to buy and sell foreign currencies, including Bitcoin.
Bitcoin strategic reserve would help the US dominate the global Bitcoin market amidst rising competition from China. Furthermore, holding a stockpile of Bitcoin would appreciate over the long term. The US could use part of these funds to decrease its deficits without raising taxes, thus helping strengthen the US dollar.
