Our actual position on a bitcoin strategic reserve. 

hello, mpumelelo from nuud here. Three weeks ago, we shared our enthusiasm about the U.S. Senate's introduction of the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2024, aiming to establish a Strategic Bitcoin Reserve. While this legislative move signifies growing institutional interest in Bitcoin, it's crucial to assess its broader implications, especially concerning Bitcoin's role in promoting financial freedom and serving as a medium of exchange.

The Reserve Fallacy

Bitcoin's capped supply of 21 million makes it an attractive asset for reserves. However, concentrating Bitcoin in governmental or corporate reserves may replicate the very issues it aims to resolve. Consider the following:

• El Salvador's Experience: Despite adopting Bitcoin as legal tender, 68% of businesses continue to price goods in U.S. dollars.

• MicroStrategy's Holdings: The company's $8 billion in Bitcoin represents a speculative concentration rather than widespread monetary utility.

• Exchange Reserves: When Bitcoin inflows to exchanges surpass outflows, it indicates hoarding rather than active transactional use.

Bitcoin's true potential is realized through active circulation—enabling everyday transactions like purchasing a hotdog or Ghanaian jollof rice. At Nuud, we're developing solutions to empower businesses to accept Bitcoin payments, ensuring it functions as intended: a decentralized currency for daily use.

Bitcoin's Role in the Remittance Revolution

Sub-Saharan Africa receives over $50 billion in remittances annually, with traditional money transfer services charging average fees of 8.9%. The Bitcoin Lightning Network offers a cost-effective alternative, settling transactions in seconds for minimal fees. Notable developments include:

• Kenya: Since August 2024, Binance's integration with M-Pesa has allowed users to convert Kenyan shillings to Bitcoin seamlessly via Transfi's One-Click Buy/Sell system. With 8.5% of Kenya's population owning cryptocurrency, this bridge is vital.

• Zambia: With 56% mobile money penetration, Binance introduced ZMW-denominated trading pairs in July 2024, providing a direct fiat-to-Bitcoin gateway.

These advancements are reshaping cross-border payments, significantly reducing costs for families dependent on remittances.

Salary Preservation Through Bitcoin

Innovative payroll models are enabling workers to hedge against inflation using Bitcoin:

• Costa Rica: Under Bill 23415, personal crypto holdings are exempt from capital gains tax, encouraging Bitcoin-based salaries. In Uvita, over 50 vendors now accept Bitcoin, fostering a functional Bitcoin economy.

• Bitcoin Jungle Project: Local businesses utilize lightweight wallets to process Bitcoin payments, decreasing reliance on unstable fiat currencies.

Regulatory Evolution

Forward-thinking governments are adapting policies to integrate Bitcoin into everyday transactions:

• Zambia's Digital Asset Act 2024: Exempts Bitcoin transactions under 500 GHS ($40) from capital gains tax and establishes a central bank liquidity pool for forex stability.

• Costa Rica's Ley Bitcoin: Mandates all government agencies accept Bitcoin payments by Q3 2025 and provides VAT exemptions for crypto-to-goods conversions.

• Kenya's National Crypto Policy: Removes capital gains tax on personal Bitcoin holdings under $10,000 while ensuring 1:1 reserve backing for exchanges.

These policies recognize that fostering monetary adoption requires reducing transactional friction, not merely accumulating reserves.

In conclusion, while establishing a Strategic Bitcoin Reserve may benefit nation-states, it doesn't directly enhance financial freedom for individuals. True empowerment comes from integrating Bitcoin into daily transactions, enabling people to navigate and overcome the challenges of inflation and economic instability.