Conor McGregor, the Irish fighter, is calling for Ireland to become a Bitcoin nation. He’s recently returned from El Salvador, where he talked with Nayib Bukele, the poster child for nation-state Bitcoin adoption. Sounds exciting, right? A champion fighter leading a financial revolution. This “nation-state Saylor play” (in the words of Max Keiser) merits a deeper dive. It’s about the larger operations that go beyond simply amassing BTC.

Bitcoin Fixes Everything? Really?

McGregor’s case rests mainly on providing the Irish people more power over their lives and achieving economic self-sufficiency. He calls Bitcoin "immutable people's money." Look, I get the appeal. The promise of an immutably decentralized currency, unaffected by the whims of government or central banks, is certainly alluring. Does Bitcoin actually fix everything?

Bitcoin volatility alone should give anyone pause. Imagine Ireland's national reserve plummeting 30% overnight. How would that empower the people? What we can learn from El Salvador’s experience – a cautionary tale, not a success blueprint. Their Bitcoin experiment has been... um, rocky, to put it mildly.

Bitcoin is a speculative asset, not a magic wand. At the moment it is not a stable store of value, though in fairness, not a whole lot is. Treating it as such is a risky bet, particularly when it comes to a country’s fiscal future.

Digital Asset Stockpile: A Broader Vision?

Perhaps in lieu of specific crypto legislation, McGregor will float a more general “Digital Asset Stockpile.” This is where things get really interesting. Is he simply a Bitcoin maximalist, or does he truly understand the broader potential and future role of blockchain technology?

While Bitcoin gets all the headlines, the underlying blockchain technology has the potential to revolutionize government processes, supply chain management, and countless other sectors.

  • Improved Transparency: Blockchain can enhance transparency in government spending and contracts.
  • Reduced Bureaucracy: Smart contracts can automate processes, reducing paperwork and delays.
  • Enhanced Security: Blockchain can secure sensitive data, protecting it from cyberattacks.

This raises questions. Which digital assets? What are the selection criteria? Who manages this stockpile? Without a definitive strategy and robust regulations in place, the “Digital Asset Stockpile” could become just another speculative piggy bank. This lack of oversight does create space for corruption to flourish. Remember McGregor's failed memecoin launch? That doesn't exactly inspire confidence.

Regulatory Scrutiny: The Elephant In The Room

Last, but certainly not least, let’s mention the regulatory boogeyman. Ireland is part of the European Union. An unexpected wave of support for Bitcoin could seriously test its new-found friendship with the EU. It may risk drawing in inappropriate attention from international regulatory agencies.

The EU is in the process of establishing its own regulatory framework for cryptocurrencies, MiCA (Markets in Crypto-Assets). Ireland should address how a national Bitcoin reserve would fit within these regulations.

The energy consumption of Bitcoin is an increasingly controversial issue. A big-ticket Bitcoin investment would surely turn heads in Brussels, particularly with the EU’s pledge to achieve climate neutrality by 2050.

Is Ireland willing to risk its standing within the EU for the sake of a Bitcoin gamble?

McGregor's vision is bold, no doubt. It’s important to cut through the hype and get to the reality of it all. Despite the attractiveness of this appealing vision, a nation-state Bitcoin reserve would be an extremely complicated, risky and fraught venture. That needs thoughtful policy making, not just a celebrity show.

We need evidence-based policymaking, not populist rhetoric. Don’t let yourself get distracted and misled by the shiny new object that is Bitcoin. Instead, let’s all work together to create a strong, sustainable, and equitable financial system that works for all the Irish people. And that can mean a lot more than hodling. It will take bold new thinking, new training, and a whole lot of skepticism.