Two of Bitcoin\u2019s pre-eminent thought leaders are at odds with each other as to whether banks can \u2013 or should \u2013 provide sustainable yield on their customers\u2019 BTC deposits.<\/p>\n
Michael Saylor \u2013 executive chairman of MicroStrategy, the world\u2019s largest corporate Bitcoin owner \u2013 said in a recent podcast appearance<\/a> that Bitcoin could become a form of \u201cperfected capital\u201d that also generates a return for its holders through digital banking services.<\/p>\n By contrast, Saifedean Ammous \u2013 author of the famous Bitcoin tome \u201cThe Bitcoin Standard\u201d \u2013 countered that sustainable yield isn\u2019t possible with a fixed supply asset like BTC.<\/p>\n According to Saylor, the first generation of \u201cdigital banks\u201d to offer Bitcoin yield were companies like BlockFi and Celsius<\/a> \u2013 which ultimately collapsed due to irresponsible management.<\/p>\n Yield at both firms was created using lending, borrowing, and rehypothecations strategies \u2013 but fell apart when those firms were liquidated on their crypto-collateralized loans. That said, if the same services were provided by mainstream banks with \u201cadult supervision\u201d and risk controls, Saylor believes they could provide Bitcoin yield in a lasting way.<\/p>\n \u201cThe best situation would be the United States government backing one of the ten biggest banks that then gave you yield on your Bitcoin, then made the loans,\u201d Saylor said. In this way, he claimed firms with megalithic balance sheets like JPMorgan could generate a 5% \u201crisk-free\u201d yield to customers on their BTC without those customers ever having to sell it.<\/p>\n Saifedean remained skeptical, however. \u201cUltimately I don\u2019t think this model works without a lender of last resort,\u201d he said. \u201cI think people are just going to learn the hard way to not do this.\u201d<\/p>\n The \u201clender of last resort\u201d refers to a central bank that can print money to bail out insolvent commercial banks and their creditors \u2013 much like what occurred during the regional banking crisis<\/a> in March 2023. Saifedean\u2019s book spends much time rebuking the evils of central banking for enabling money printing that devalues the savings of the population.<\/p>\n \u201cIf everyone\u2019s got their Bitcoin at 5%, how are we gonna make more Bitcoin?\u201d the economist asked. \u201cEventually more Bitcoin needs to be paid than there is Bitcoin in existence.\u201d<\/p>\n Saifedean made a similar point<\/a> to Celsius CEO Alex Mashinsky back in 2019 before the latter\u2019s company went under 3 years later. Mashinsky was scheduled to begin his fraud trial this week, but the trial has now been delayed until January 2025.<\/p>\n In response, Saylor said that big banks are backed by the government, and so they ultimately couldn\u2019t fail unless the U.S. government itself failed. Furthermore, he said if holders can\u2019t generate yield on their Bitcoin, then BTC will be a \u2018non-performing\u2019 asset no better than government bonds that pay 0% yield.<\/p>\n \u201cWe need a functioning banking system to move the capital around,\u201d he said. \u201cWhy would you apologize for getting paid a return on your capital?\u201d<\/p>\n The post Bitcoin Standard Author Challenges Michael Saylor: Should Banks Offer Yield On Your BTC?<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Two of Bitcoin\u2019s pre-eminent thought leaders are at odds with each other as to whether banks can \u2013 or should \u2013 provide sustainable yield on their customers\u2019 BTC deposits. Michael Saylor \u2013 executive chairman of MicroStrategy, the world\u2019s largest corporate Bitcoin owner \u2013 said in a recent podcast appearance that Bitcoin could become a form […]<\/p>\n","protected":false},"author":0,"featured_media":7926,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7925","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7925"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7925"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/7925\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/7926"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Can Bitcoin Yield Really Work?<\/h2>\n
Lender of Last Resort<\/h2>\n