Andrew Hones, CEO of Pneumarkate Capital, suggested that bitcoin was included in government bonds as a way to reduce national debt in government bonds and buy bitcoins for US strategic reserve.
Bitcoin (BTC) Policy Institute in bitcoin on March 11 Proposal of The idea of ”Bit Bonds”, a novel type American Treasury Bond that involves bitcoin into government financing. The idea of issuing bonds to American families offering tax-free investment vehicles, reducing government borrowing costs and making a strategic bitcoin reserve.
Honon suggested the issue of about $ 2 trillion bits bonds to the US government’s issue, with 90% of funds allocated for government procurement and 10% income would be used to purchase bitcoins. This means that for each $ 100, approximately $ 10 will go to BTC.
“If it is going to release the correct $ 2 trillion with the bat, it would mean $ 200 billion bitcoin if purchased at $ 90,000 per BTC. It is 2.22 million bitcoin. Of course, the price will rise and there is a possibility that we will receive a different amount from it, ”Han said during his presentation.
According to the CEO of the Pneumarkate Capital, the bonds will be able to acquire a bitcoin worth $ 200 billion to the United States federal government saving $ 554 billion at 10 years interest rates at the same time.
This is because bit bonds provide a much lower rate of 1% per year compared to the 4.5% interest rate of the American Treasury. Thus, it can significantly cut interest expenses.
In addition, he said that Bit Bonds would become an attractive investment for foreign investors, as they can serve as eligible collaterals to limit various swaps and derivative arrangements. According to Hayn, investors give a chance to achieve 4.5% compound annual growth rate on a senior basis, which aligns with current treasury yields.
After earning this fixed return, investors get a 50% share from the reverse of bitcoin purchase, while the US government receives the remaining 50%. Depending on the performance of bitcoin, the total returns for investors can be quite attractive, from about 7% to 17% annually on a tax-free basis.
“It produces a government right of bitcoin that is slightly higher than $ 50.8 trillion which is the expected size of the federal loan funded in the year 2045. In other words, with this plan, we are in a position to reject the federal loan,” Hain said.
In addition, he also suggested that bit bonds are available to American citizens as it is “a powerful tool for prevention of inflation.” As a savings means, Han said that the bonds should be free from income tax and capital gains tax for American people.
He claimed that a family could invest $ 2,900 and achieve a yield of 7% to 17% over a period of 10 years depending on the performance of bitcoin throughout the years.
