Author: Michael Saylor
Compiled by: Pliers, PANews
Editor's note: Michael Saylor, founder of Strategy, the world's largest Bitcoin treasury company, published a long article "How to Prosper the Digital Economy", trying to answer a more basic question in the context of AI accelerating the reshaping of production methods: Based on digital rights, corporate financing, digital dollars, banks and insurance institutions adopting Bitcoin, securities tokenization, financial privacy, KYC compliance and AI Agent financial infrastructure, does the existing financial system also need to change accordingly? PANews is compiled as follows:
Artificial intelligence will enable individuals and businesses to create output far beyond current levels. This means that giving people the freedom to create, finance, own and exchange things will become even more important. A more productive economy requires a better currency and better capital markets to unlock its potential.
I discussed these ideas with Conner Brown at the Bitcoin Policy Institute’s Freedom Tech DC Summit. My core policy recommendation is clear: individuals and businesses need the right to create, issue, host, transfer and use digital assets to create wealth and prosperity.
The era of digital assets and digital intelligence requires a digital bill of rights, not a restrictive bill.
Start by protecting the rights of individuals and businesses
Freedom begins with the ability to act. A useful digital asset framework should establish five fundamental rights.
Create: Develop new digital assets, financial instruments and applications.
Issue: Bringing these assets to market and using them to finance businesses and productive activities.
Custody: Hold assets directly, or choose a custodian that can provide the best service.
Transfer: Transfer assets between individuals, businesses, wallets, and service providers.
Use: Spend, invest, earn income, and borrow against assets.
These rights should belong to both individuals and businesses. They need to be underpinned by financial privacy and viable market access. The value of an asset depends on what its owner is able to do with it. If you limit its availability, you limit its economic potential.
Digital tokens, digital currencies, digital capital and digital securities perform different economic functions. Policies should recognize these differences while preserving a common basis of ownership and freedom.
Clear disclosure, enforceable ownership and accountability for fraud are fundamental to the proper functioning of markets. Rules should allow honest participants to transact with greater confidence, while also leaving room for products and business models that don’t yet exist.
Let 10 million new enterprises obtain financing
Digital intelligence will automate jobs, transform industries, and render existing products obsolete. Prosperity will depend on our ability to create new businesses and new opportunities at a faster pace.
A person who can develop a product using AI should also be able to raise capital for the company that will bring that product to market. As the technology for building a business continues to advance, the cost, complexity, and time of raising capital should all fall.
Digital tokens offer a way to make capital formation faster and cheaper. Policymakers should establish clear, practical issuance rules, disclosure requirements commensurate with size, and simple ways for entrepreneurs to directly access potential investors. Small business financing should be accessible to those who cannot afford an army of lawyers.
The goal should be to enable 10 million new businesses to raise capital. Only in this way can the productivity brought about by digital intelligence be transformed into new jobs, new products, and more widely shared prosperity.
If existing business models are protected while making it difficult for their successors to obtain financing, the economy will not be adequately prepared for technological change.
Let the digital dollar compete
Digital currencies can put dollars into the hands of people around the world and allow them to move at the speed of light.
If we want the dollar to succeed, we should want the best companies to compete to make the dollar more useful. Banks, fintechs, and tech platforms should all have a clear path to offering a digital dollar. Just imagine how widespread USD products would be if they were built into the devices and apps that billions of people already use.
Issuers should also be allowed to compete on yield. Customers should be able to choose between different benefits, services, and clearly disclosed risks. If competition for yield is suppressed in order to protect institutions that pay little or no interest, then such a policy effectively puts the interests of those institutions ahead of those of their customers.
My suggestion is to allow this competition. Where laws prevent such competition, the laws should be changed.
The United States has an opportunity to further expand the use and reach of the dollar by allowing American businesses to build better products around it.
Let Bitcoin enter the banking and insurance system
Bitcoin is Digital Capital. Bitcoin’s utility increases when individuals and businesses can securely hold it, use it efficiently for financing, and integrate it into other parts of the economy.
Banks should be able to custody Bitcoin and extend credit against Bitcoin under clear and commercially viable rules. Insurers should also have practical ways to incorporate digital capital into their balance sheets and product designs. Competition should prompt them to improve customer welfare and reduce costs.
This requires a reexamination of accounting, capital and regulatory rules that make these activities unnecessarily difficult. The Basel Accord’s adoption of a 1,250% risk weight for Group 2b crypto asset exposures is an example of the severity of existing capital regulations. I believe that policymakers should revisit this treatment and evaluate digital assets based on their actual risks and the specific business activities involved.
Holding assets for customers, providing loans against collateral, and holding an asset on a bank's own balance sheet are all distinct activities. Regulation should distinguish between them.
As more institutions compete to serve Bitcoin holders, Bitcoin holders will have more ways to use their capital without selling their assets. Businesses will gain financing, financial institutions will gain customers, and digital capital will become more productive in the economic system.
I expect bank adoption to be a significant driver of growth in the industry. As banks compete to provide custody and credit services, more capital will enter a market with a limited supply of the core asset — Bitcoin.
Let tokenization expand owner rights
Tokenized securities make stocks and credit available around the clock and across markets. Their greatest potential lies in what they enable asset owners to do.
Investors should be able to hold tokenized securities directly, transfer them to their preferred service providers, and use these assets in competitive custody and credit markets. Businesses should also have these rights.
Suppose an investor holds $1 million in stocks. One service provider may offer better financing terms; another may offer revenue opportunities; and a third may offer better services. Investors should be able to compare these options and move assets accordingly.
Even if you end up choosing a hosting provider, self-hosting is still important. Having the ability to leave means that customers have bargaining power. If assets can be transferred, service providers must compete to retain customers. This competition can improve services, lower borrowing costs, and allow asset owners to capture more of the economic value created by their assets.
If you just put securities on the blockchain but still limit them to the same closed system of intermediaries, much of the potential of this opportunity remains unrealized. The policy goal should be to expand options for asset owners.
Protect financial privacy
Financial privacy is part of economic freedom. Individuals should be able to live their normal lives and businesses should be able to conduct their day-to-day business without unnecessary disclosure of their financial status. Protecting this privacy also means protecting personal security, business strategies, and the freedom to choose who to do business with.
My policy preference is clear: For ordinary legal transactions below a meaningful threshold (such as $10,000), routine government reporting should not be triggered simply because funds or digital assets are transferred. A reporting system should serve a clear public purpose and its burdens should be commensurate with the risks. Privacy in everyday business activities can coexist with targeted reporting and investigation of suspicious activity.
Current federal monetary transaction reporting rules in the United States apply to cash transactions exceeding $10,000, including transactions consolidated under the relevant rules. This threshold dates back to 1972. The U.S. Government Accountability Office (GAO) estimated in a 2024 report that the corresponding threshold in 2023 would be about $72,880, adjusted for inflation. If things remain unchanged for decades, more and more ordinary economic activities will be absorbed into a system originally designed for transactions on a much larger scale.
Policymakers should raise the already outdated reporting threshold and index it for inflation. The digital economy also needs clear protection for everyday transfers between individuals, between businesses, and between different accounts or wallets of individuals or businesses themselves. Being able to transfer assets efficiently and privately is part of the practical value of assets.
Make compliance portable
In the over-the-counter market, the same investor may be required to complete separate anti-money laundering (AML) and know-your-customer (KYC) procedures for each financial counterparty. Documents are collected repeatedly, identities are verified repeatedly, and approvals can take days. With each new relationship, additional costs are incurred before any productive activity can begin.
The goal should be to enable billions of investors to complete transactions in seconds with millions of service providers at almost negligible cost. If every relationship had to be re-reviewed manually, we might end up with exactly the opposite: thousands of investors, dozens of service providers, days of waiting, and huge costs. This represents two different visions of the scale and accessibility of the financial system.
Policymakers should make it feasible to authenticate once and, with the customer’s permission, reuse trusted credentials across different service providers, with appropriate updates. Existing banking rules already allow reliance on another financial institution's identity verification process in limited circumstances. We should expand the scope of what can actually be relied upon, clarify responsibilities and liabilities, and support interoperable credentials that disclose only the information required for a transaction.
Service providers remain responsible for assessing risk and monitoring for suspicious activity. But routine verification should be reusable and additional review should be based on actual risk. Collecting the same sensitive documents over and over again not only increases costs, but also creates more copies of the information that need to be protected.
Reducing account opening and entry costs will make it easier for investors to compare service providers, make it easier for new businesses to win customers, and make it easier for businesses to obtain capital. Privacy and competition can actually reinforce each other when customers are able to demonstrate necessary information without providing more than what is required by the service.
Make digital currency truly suitable for daily use
The right to use the asset must be able to be truly useful in daily life. Buying dinner or paying for a common service should not turn a client into a tax accountant. Under current U.S. tax rules, using digital assets for consumption may require calculating and reporting capital gains or losses. This administrative burden can hinder the use of digital assets in daily life.
Policymakers should establish a meaningful de minimis exemption for ordinary digital asset payments. A purchase limit of $20 or $200 is not high enough for modern business. A family dinner can cost more than $200. Calling small amounts of token payments financial freedom underestimates what citizens really need to participate in the digital economy.
Specific design is important. Thresholds based on taxable gains are different from limits based on purchase amounts. The exemption should be large enough to cover ordinary consumption and adjusted for inflation, yet simple enough so that eligible payments do not need to be calculated and recorded on a case-by-case basis, thereby eliminating unnecessary administrative burdens.
Tax exemptions and government reporting thresholds address different issues. Both should respect citizens' time and the economic laws of daily life. An asset that can be transferred instantly but comes with hours of paperwork doesn’t really deliver on the promise of digital currency.
Build a financial system that AI Agent can use
We are moving toward an economy in which software will do more and more of the work that used to be done by people over the phone, on websites, and in face-to-face meetings. AI Agents will increasingly conduct research, negotiate, purchase, and coordinate with other Agents.
This economy requires financial infrastructure that can continue to function. Currency and capital must be provided at the speed of the software and be available 24 hours a day, 7 days a week, 365 days a year.
Traditional financial systems are built around human identities, human interfaces, and when humans work. As individuals and businesses turn more of their activities over to AI, they need practical ways for their agents to conduct transactions on their behalf. This means the need for digital wallets, programmable payments, transferable assets, and financial services that can be directly accessed by software.
Bitcoin and other digital assets are a natural fit for this environment. An Agent running in an Internet environment requires capital that can be identified and used digitally. It can't move a gold bar at the speed of light, or wait months to complete a real estate deal every time it needs to deploy resources.
Digital intelligence will increase the scale of productive activities that can be carried out. Digital assets can help finance and coordinate these activities. I predict that the next wave of innovation will emerge from the intersection of the two.
Promote technical capabilities as a national priority
AI creates both opportunities and risks. Some people will use powerful technology to engage in harmful activities. The response should be to ensure that responsible individuals, businesses and public institutions have the ability to protect themselves.
If an adversary uses an AI agent, an effective defense may require a more powerful agent. A country that restricts its own technological development cannot assume that its opponents will accept the same restrictions.
We already understand this in the areas of air power, space power, and cyber power. National security depends on the ability to develop and deploy advanced technologies.
America should put the best tools in the hands of individuals, businesses, schools, and public institutions. We should enable students to use AI to learn and entrepreneurs to use AI to build. Solving problems more efficiently is itself a reason to develop a technology's potential.
Technical leadership requires broad participation. Every person we empower becomes another source of innovation, productivity and resilience.
Let regulators take the lead in areas where they can take action
Over the next two years, I believe the most promising path to promoting greater digital asset freedom will be through the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Treasury Department, and the White House.
The SEC should make capital formation and tokenized securities more useful and accessible. The CFTC should promote competitive digital commodities and derivatives markets. The U.S. Treasury Department and bank regulators should establish viable pathways for custody, credit, payments, and the integration of digital capital into financial institutions. The White House should coordinate national-level direction toward innovation and economic leadership.
Each agency should use its statutory authority to remove unnecessary barriers and establish a clear development path for new products. Where legislation is needed, Congress should expand the rights of individuals and businesses.
The reason I oppose the path taken by the CLARITY Act is that it places too much emphasis on restrictions. The measure of any proposal should be what people can actually create, own, transfer and use after it takes effect.
A long and detailed law that protects existing intermediaries by limiting the availability of new assets could still be a poor basis for a prosperous economy. When a law makes productive innovation impossible, certainty in itself is of little value.
Create products that make freedom last
One argument in favor of comprehensive legislation is that it would protect the industry from future unfriendly governments. This is a reasonable goal. But the price of such protection would be too high if a law eliminated much of the industry's potential in the first place.
There’s another source of lasting freedom: building practical products that people actually rely on.
It’s difficult for Washington to protect a product that doesn’t yet exist and has no customers using it. Once millions of people use a product to save, finance a business, or improve their lives, its value becomes tangible. These customers then have something concrete and worth maintaining.
The industry should be building great products, bringing them to market, and earning that support. Policymakers should give it such space. We can continue to refine the rules as the market develops and practical issues become clear.
I believe that digital assets can eventually develop into a $100 trillion industry. Realizing this potential will require millions of people and millions of companies to continually explore better ways to create and organize capital.
Give them the right to create, issue, host, transfer and use digital assets. Let them compete and make these assets more useful.
This is how we create wealth and prosperity in the smart age.