The Radical Plan to Replace the US Dollar with Bitcoin

The news is spreading like wildfire in Washington D.C. - a radical policy plan created by the right-wing Heritage Foundation think tank, known as Project 2025, is gaining traction. The plan suggests a massive overhaul of the US government, including the abolition of the Federal Reserve and the creation of a system of free banking or a commodity-backed replacement for the US dollar.

The potential future of banking

According to Paul Winfree, who served in Trump’s 2017 to 2021 administration, under free banking, banks would issue liabilities denominated in dollars and backed by a valuable commodity, such as gold, another currency, or even assets like real estate. This open-ended nature of free banking leaves the door open for banks to back their notes with bitcoin or another cryptocurrency.

“Free banking leads to stable and sound currencies and strong financial systems because customers will avoid the riskier issuers, driving them out of the market.” - Paul Winfree

Meanwhile, a commodity-backed dollar would see the Fed back the notes it issues with a hard asset like gold, in a system designed to rein in spending and inflation lest their gold reserves become depleted.

Bitcoin’s surge in popularity

Bitcoin, often referred to as digital gold due to its immutable nature and fixed supply, has seen its price surge over the last few years as it’s embraced by Wall Street and adopted by the country of El Salvador as an official currency. The bitcoin price has surged in recent years, leading to serious speculation it could eventually eclipse both gold and the US dollar.

As Larry Fink, the BlackRock chief executive, said last year, bitcoin and crypto could “revolutionize finance.” This led to a chain-reaction that saw a fleet of spot bitcoin exchange-traded funds (ETFs) exploding onto Wall Street in January.

Countries adopting bitcoin

Former billionaire and All In podcast “bestie” Chamath Palihapitiya predicted bitcoin could “completely replace gold” as countries adopt it, potentially pushing its market capitalization toward gold’s $15.7 trillion.

Fears of a looming economic crash and the return of inflation led Jefferies’ analysts to say they expect the Federal Reserve will soon be forced to restart its money printer, potentially collapsing the US dollar and fueling a bitcoin price boom to rival gold.

The question remains, will Project 2025 be the catalyst for a radical shift in the US financial system, and could bitcoin be the ultimate replacement for the US dollar?

The future of cryptocurrency