We explored the U.S. Senate’s BITCOIN Act of 2024 aimed at establishing a Strategic Bitcoin Reserve, questioning if concentrating Bitcoin in government or corporate vaults can truly support its original purpose of enabling decentralized, peer-to-peer payments and self-custody. Examples like El Salvador’s persistent reliance on the dollar, MicroStrategy’s speculative holdings, and exchange hoarding illustrate that real financial empowerment comes only when Bitcoin circulates actively in everyday transactions.

Hello hello, mpumelelo at 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, which aimed to establish a Strategic Bitcoin Reserve. At that time, we raised an important question: Can a strategic reserve live out what Bitcoin was originally created for—decentralized, peer-to-peer payments and true self-custody?

The Reserve Fallacy

Bitcoin’s capped supply of 21 million makes it an attractive asset for reserves. However, concentrating Bitcoin in governmental or corporate vaults may replicate the very issues it was meant to solve. Consider the following examples:

• El Salvador's Experience: Even after adopting Bitcoin as legal tender, 68% of businesses continue to price goods in U.S. dollars—suggesting that simply holding Bitcoin does not automatically encourage its everyday use.

• MicroStrategy's Holdings: With $8 billion in Bitcoin, MicroStrategy demonstrates a speculative concentration rather than promoting widespread monetary utility.

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

Bitcoin’s true potential is realized when it circulates actively—enabling everyday transactions like buying a hotdog or Ghanaian jollof rice. At Nuud, we’re developing solutions that empower businesses to accept Bitcoin payments, ensuring it functions as a decentralized currency for daily use rather than as an inert store of value.

Bitcoin’s Role in the Remittance Revolution

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

• Kenya: Since August 2024, Binance’s integration with M-Pesa has enabled seamless conversion of Kenyan shillings to Bitcoin via Transfi’s One-Click Buy/Sell system. With approximately 8.5% of Kenya’s population owning cryptocurrency, this bridge plays a vital role in easing remittance flows.

• Zambia: With 56% mobile money penetration, Binance introduced ZMW-denominated trading pairs in July 2024, providing a direct fiat-to-Bitcoin gateway that reshapes cross-border payments and reduces costs for families dependent on remittances.

Salary Preservation Through Bitcoin

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

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

• Bitcoin Jungle Project: Local businesses utilize lightweight wallets to process Bitcoin payments, reducing 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 (approximately $40) from capital gains tax and establishes a central bank liquidity pool to enhance forex stability.

• Costa Rica's Ley Bitcoin: Mandates that 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 and requires 1:1 reserve backing for exchanges.

These policy shifts underscore that fostering monetary adoption requires reducing transactional friction—not merely accumulating reserves.

While establishing a Strategic Bitcoin Reserve may benefit nation-states by boosting institutional confidence and regulatory clarity, it does not automatically enhance financial freedom for individuals. True empowerment comes from integrating Bitcoin into daily transactions and ensuring that it remains true to its original ethos of decentralized, peer-to-peer payments and self-custody.

At Nuud, we continue to build solutions that promote everyday crypto usage—because we believe that real change comes from empowering individuals, not just stacking reserves in vaults.