- A new Bank for International Settlements paper by economist Iñaki Aldasoro argues that bitcoin cannot function as money because it lacks trust architecture, a lender of last resort, and a responsive supply — while Strategy co-founder Michael Saylor contends bitcoin is capital, not currency, and is too valuable to be spent.
- Despite reaching opposite conclusions about bitcoin’s limitations, both Aldasoro and Saylor describe an identical structural outcome: a scarce base asset at the bottom with a credit superstructure built on top, mirroring how gold historically functioned within financial systems.
- Critics note the BIS paper applies a double standard, demanding trust institutions for bitcoin that fiat money itself only acquired after the fact, while bitcoin’s use as collateral and its surrounding financial ecosystem continue to expand rapidly.
BIS Economist and Michael Saylor Agree Bitcoin Isn’t Everyday Money — But for Entirely Opposite Reasons
A working paper published by the Bank for International Settlements (BIS) and authored by economist Iñaki Aldasoro has reignited the foundational debate over what bitcoin is, what it can become, and why it has not yet displaced conventional money. Separately, Strategy co-founder and bitcoin evangelist Michael Saylor has spent years building a parallel framework that reaches the same surface-level conclusion — bitcoin is not everyday money — but through a radically different line of reasoning. The collision of these two perspectives reveals a deeper structural consensus hiding beneath ideological opposition.
What the BIS Paper Actually Argues About Bitcoin and Trust
At the core of Aldasoro’s argument is a strict definition of money as a means of settlement that extinguishes an obligation when it is due, while credit is defined as a promise to pay money. Trust, he contends, is not optional — it is constitutive of money itself. In one of the paper’s most direct formulations, Aldasoro wrote:
“The dog wants an asset that is no one’s liability because it does not trust. It wants gold. It wants bitcoin. But it cannot have money without trust, because money without trust is a contradiction in terms.”
Aldasoro categorizes gold not as a monetary alternative but as “a monetary protest,” and says bitcoin “shares this impulse and adds a technological veneer.” He criticizes bitcoin’s fixed supply as “unresponsive to any conceivable state of the world” — a position that bitcoin advocates have consistently rebutted by arguing that predictable scarcity is a feature, not a flaw. Aldasoro also cites the failed attempts to introduce bitcoin as legal tender in El Salvador and the Central African Republic as evidence of its practical monetary limitations.
Yet the paper contains a notable internal tension. Aldasoro concedes that bitcoin’s design eliminates “trust in an issuer rather than trust itself,” consistent with Satoshi Nakamoto’s white paper, which states the system operates “…without the need for a trusted third party.” He also argues that all fiat money is “sustained by a shared expectation” of future acceptance — the same criterion he uses to question bitcoin’s monetary legitimacy — while maintaining that fiat money’s expectation is “grounded in institutions” such as central banks and governments. Critics argue this framing grants fiat money an institutional credibility it only developed long after the private sector had already established monetary systems, undermining Aldasoro’s point that bitcoin’s absence of legal tender status disqualifies it from functioning as money.
Michael Saylor’s Competing Vision: Bitcoin as Digital Capital
While Aldasoro approaches bitcoin as a monetary theorist skeptical of its viability, Michael Saylor approaches it as an investment architect who has placed approximately $71 billion of Strategy’s balance sheet behind a single conviction: bitcoin is capital, not currency. Saylor has argued for years that bitcoin’s value proposition lies precisely in its scarcity and its unsuitability as a transactional medium.
“Digital Capital is the foundation for Digital Equity and Digital Credit,” Saylor said recently. In June, he elaborated on what he terms “digital money” — a dollar-pegged, yield-bearing product built from bitcoin-backed credit combined with fiat cash equivalents that could function as a practical medium of exchange. The structure is explicit: consumers would pay with digital money, not with bitcoin itself. Saylor framed this not as a retreat from bitcoin but as a transitional mechanism:
“This is not a rejection of Bitcoin. It is a bridge from the fiat world to the Bitcoin world.”
Strategy already markets credit products consistent with this framework, including the yield-paying preferred stock instrument STRC. The product is not directly collateralized by Strategy’s bitcoin holdings, with dividends sourced from the company’s operations. In October, Saylor also pitched a bitcoin-backed stablecoin offering yields of up to 8%. On the question of volatility, Saylor argued in June:
“A 40% volatility asset is perfect for some investors and unsuitable for others. The answer is not to change Bitcoin. The answer is to build products above Bitcoin that match the needs of each pool of capital.”
The Bitcoin ‘Credit Superstructure’: Where Aldasoro and Saylor Converge
Strip away the ideological framing and both Aldasoro and Saylor describe the same architecture. Writing about gold, Aldasoro explains that in systems built around a scarce base asset, “the settling is done in a credit superstructure, with the metal anchoring rather than circulating.” He applies this model exclusively to gold. Saylor applies the identical logic to bitcoin. In July, Strategy’s executive chairman stated:
“Gold became more useful when banks, capital markets, credit instruments, and settlement systems developed around it.”
Both figures also agree that fiat money — and specifically the U.S. dollar — remains the dominant unit of account. Saylor acknowledges that bitcoin is “not yet the unit of account for most of the world.” Both also flag the systemic risk inherent in credit expansion: when more claims are made against a scarce base asset, such as bitcoin or gold, than the asset itself can support, instability follows. The collapse of crypto lenders Celsius and BlockFi, and the exchange FTX, in 2022 demonstrated this risk in practice, with no public backstop available when each failed. On failed bitcoin companies broadly, Saylor said at BTC Prague this year that some “probably had poor financial practices” and “maybe they were overleveraged.”
The bitcoin credit ecosystem is nevertheless continuing to develop. TD Cowen analyst Lance Vitanza recently observed that the conversation is now “moving beyond bitcoin ownership and toward the ecosystem being built around it,” a signal that institutional interest in bitcoin’s financial infrastructure has become distinct from interest in bitcoin itself as a spot asset.
Double Standards and the Fiat Comparison Problem
The BIS paper has attracted criticism for the asymmetric standards it applies when comparing bitcoin to fiat money. Aldasoro writes that bitcoin’s “value rests entirely on the expectation that others will value it” — yet his own framework states that all money is “sustained by a shared expectation” of acceptance. The difference he draws, that fiat’s expectation is institutionally grounded while bitcoin’s is not, requires accepting that institutions validate money rather than money validating institutions. Bitcoin advocates argue the historical record supports the reverse: private monetary forms typically preceded official recognition.
Aldasoro also argues that public backstops — central banks, deposit insurance, and government guarantees — are necessary for monetary systems to function at scale. Strategy’s framework, by contrast, positions shareholders as the risk-absorbing layer. As Saylor has described it, shareholders form the “junior tranche” that “absorbs volatility,” with no public institution standing behind them. The BIS and Saylor thus differ fundamentally on where systemic risk should ultimately rest.
Why This Matters
The debate between the BIS paper and Saylor’s Strategy framework is not merely academic. With roughly $71 billion in bitcoin held by a single publicly traded company, with nation-states having tested bitcoin as legal tender, and with a growing ecosystem of bitcoin-backed credit and yield products taking shape, the question of what role bitcoin plays in the global monetary system has direct implications for regulators, institutional investors, and retail holders alike. The BIS, as the central bank for central banks, carries significant institutional authority. Its characterization of bitcoin as a “monetary protest” rather than a functional alternative will inform how policymakers in multiple jurisdictions approach regulation, reserve policy, and legal tender discussions. At the same time, Strategy’s commercial success in packaging bitcoin exposure for institutional investors demonstrates that market demand for bitcoin’s financial infrastructure is already outpacing the theoretical debate.
As Saylor noted in June, leaving the longer-term trajectory deliberately open: “The world does not need everyone to price coffee in sats tomorrow.” What comes after tomorrow remains, for now, the central unresolved question.
Frequently Asked Questions
What is the core argument of the BIS paper about bitcoin?
BIS economist Iñaki Aldasoro argues that bitcoin cannot function as money because money requires trust, and the specific trust architecture bitcoin eliminates — a central issuer, a responsive supply, and a lender of last resort — is the same architecture that makes money operationally reliable. He describes bitcoin as “a monetary protest” rather than a monetary alternative, comparing its impulse to that of gold while noting it “adds a technological veneer.”
How does Michael Saylor’s position differ from the BIS paper’s conclusion?
Both Saylor and Aldasoro conclude that bitcoin does not currently function as everyday money, but their reasoning is inverted. Aldasoro argues bitcoin is deficient — lacking an IOU structure, a flexible supply, and public backstops. Saylor argues bitcoin is too valuable and too scarce to be spent, and that the correct response is to build financial products layered above bitcoin that serve transactional purposes, rather than to modify bitcoin itself.
What is the bitcoin ‘credit superstructure’ and why does it matter?
The bitcoin credit superstructure refers to financial products, instruments, and systems built on top of bitcoin as a base asset — mirroring how banks, credit markets, and settlement systems developed around gold. Both Aldasoro and Saylor describe this architecture, though Aldasoro applies it only to gold while Saylor explicitly extends it to bitcoin. This structure is already forming through bitcoin-backed credit products, yield instruments, and institutional vehicles, and analysts such as TD Cowen’s Lance Vitanza have noted that institutional focus is increasingly shifting toward this ecosystem rather than simple bitcoin ownership.
