Michael Saylor: Twelve Policy Recommendations to Promote the Prosperity of the Digital Economy

Artificial intelligence will enable individuals and businesses to create value far beyond what is currently possible. This makes the freedom to create, finance, own, and exchange even more important. To unlock the potential of a higher productivity economy, we need better currencies and capital markets.

At the Freedom Tech DC summit hosted by the Bitcoin Policy Institute, I discussed these views with Conner Brown. My core policy assertion is straightforward: individuals and businesses need the right to create, issue, custody, transfer, and use digital assets to generate wealth and prosperity.

The era of digital assets and artificial intelligence requires a bill that protects digital rights, rather than one focused on restrictions.

Starting from the Rights of Individuals and Businesses

Freedom begins with the ability to act. A framework applicable to digital assets should establish five fundamental rights.

Creation: Developing new digital assets, financial instruments, and applications.

Issuance: Bringing these assets to market and using them to finance businesses and productive activities.

Custody: Directly holding assets or choosing the custodian that best suits one's needs.

Transfer: Transferring assets between individuals, businesses, wallets, and service providers.

Use: Consuming, investing, earning income, and using assets as collateral for loans.

These rights should equally belong to individuals and businesses. Protecting these rights requires financial privacy and practical market access. The value of an asset depends on what the owner can do with it. Limiting the use of an asset restricts its economic potential.

Digital tokens, digital currencies, digital capital, and digital securities serve different economic functions. Policies should recognize these differences while maintaining a common foundation of ownership and freedom.

Clear information disclosure, legally enforceable ownership protections, and accountability for fraud help the market operate normally. Rules should allow honest participants to trade with confidence and leave room for products and business models that have yet to emerge.

Enabling 10 Million New Businesses to Access Financing

Artificial intelligence will automate many jobs, transform various industries, and render existing products obsolete. Prosperity will depend on our ability to create new businesses and opportunities at a faster pace.

If an individual can develop a product with the help of AI, they should also be able to finance the company that brings the product to market. As entrepreneurial technology continues to advance, the costs, complexities, and time required for financing should decrease accordingly.

Digital tokens can make financing faster and cheaper. Policymakers should establish clear and practical issuance rules, create information disclosure requirements commensurate with risk, and provide entrepreneurs with direct access to potential investors. Small business financing should not be limited to those who can afford a large team of lawyers.

Our goal should be to enable 10 million new businesses to raise funds. This way, the productivity brought by artificial intelligence can translate into new job opportunities, new products, and prosperity that benefits more people.

If we protect existing business models while making it difficult for successors to obtain financing, the economy will struggle to adapt to technological changes.

Allowing Digital Dollars to Compete

Digital currencies can enable people around the world to hold dollars and allow dollars to circulate at lightning speed.

If we want the dollar to succeed, we should let the best companies compete to enhance the utility of the dollar. Banks, fintech companies, and tech platforms should have clear pathways to provide users with digital dollars. Imagine if dollar products could be integrated into devices and applications that billions of people are already using; the reach would be immense.

Issuers should also be able to compete on yields. Customers should be able to choose between different products, comparing their returns, services, and clearly disclosed risks. Pressuring yields down to protect institutions that pay little or no interest effectively places the interests of these institutions above those of customers.

My recommendation is to allow this competition. If the law prevents competition, it should be amended.

The United States has the opportunity to expand the use and reach of the dollar, allowing American companies to develop better products around the dollar.

Allowing Bitcoin into Banking and Insurance

Bitcoin is digital capital. The ability for individuals and businesses to safely hold Bitcoin, efficiently finance with it, and integrate it into other areas of the economy will enhance Bitcoin's utility.

Banks should be able to custody Bitcoin under clear and practical rules and issue loans secured by Bitcoin. Insurance companies should also have practical pathways to incorporate digital capital into their balance sheets and product designs. Competition should drive them to improve customer rights and reduce customer costs.

This requires us to examine accounting, capital, and regulatory rules that make relevant businesses unnecessarily difficult. The Basel framework sets the risk weight for Group 2b crypto asset exposures at 1250%, illustrating how stringent some existing capital rules are. I believe policymakers should reassess this approach and evaluate them based on the actual risks of digital assets and specific business activities.

Holding assets for customers, issuing loans based on collateral, and holding positions on a bank's own balance sheet are different activities. Regulation should distinguish between them.

As more institutions compete to serve Bitcoin holders, holders will be able to use their capital in more ways without selling Bitcoin. Businesses will gain financing channels, financial institutions will gain customers, and digital capital can play a larger role in the economy.

I expect that banks adopting Bitcoin will become a significant force driving industry growth. As banks compete to offer custody and credit services, more capital can enter this market, while the supply of Bitcoin, as a core asset, is limited.

Expanding Asset Owners' Rights through Tokenization

Tokenized securities can make equity and credit products available around the clock and circulate across markets. Their greatest potential lies in what asset owners can do.

Investors should be able to directly hold tokenized securities, transfer them to their preferred service providers, and use this asset in a competitive custody and credit market. Businesses should also enjoy these rights.

Imagine an investor holding $1 million in stocks: one service provider might offer better financing terms, another might provide opportunities for earning, and a third might offer better service. Investors should be able to compare these options and transfer assets accordingly.

Even if people ultimately choose a custodian, self-custody remains important. The ability to leave gives customers bargaining power. If assets can be freely transferred, service providers must compete to retain customers. This competition can improve services, lower borrowing costs, and allow owners to capture more economic value created by their assets.

If securities are merely placed on the blockchain but remain confined within the same closed intermediaries, much of the technology's potential will remain unrealized. The goal of policy should be to expand the choices available to asset owners.

Protecting Financial Privacy

Financial privacy is part of economic freedom. Individuals should be able to live normally, and businesses should be able to conduct daily operations without unnecessarily disclosing their financial situations. Protecting financial privacy also helps ensure personal safety, business strategies, and the freedom to choose trading partners.

My policy assertion is clear: for ordinary legitimate transactions below a reasonable threshold (e.g., $10,000), routine government reporting obligations should not be triggered solely by the transfer of funds or digital assets. Reporting requirements should serve a clear public purpose, and the burdens imposed should be proportional to the risks. Privacy protection in everyday business activities can coexist with reporting and investigations of suspicious activities.

The familiar federal cash transaction reporting regulations apply to cash transactions over $10,000 and include transactions calculated in aggregate according to the rules. This threshold was set in 1972. The U.S. Government Accountability Office estimated in a 2024 report that, adjusted for inflation, the threshold for 2023 should be approximately $72,880. Decades without adjusting the threshold will subject more ordinary economic activities to a regime originally designed for transactions of much larger amounts.

Policymakers should raise outdated reporting thresholds and adjust them for inflation. The digital economy also needs to clearly protect people's rights to conduct daily transfers between each other, between businesses, and between accounts or wallets in their own names. Efficiently and privately transferring assets is part of asset utility.

Enabling Compliant Information to Be Used Across Institutions

In the over-the-counter market, the same investor may need to complete anti-money laundering and know-your-customer processes separately for each financial counterparty. Documents must be resubmitted, identities re-verified, and approvals may take days. Each additional layer of business relationship incurs a cost before productive activities can begin.

Our goal should be to enable billions of investors to transact with millions of service providers in seconds, with costs that are almost negligible. If every business relationship requires a new manual review, the reality may be quite the opposite: only thousands of investors and dozens of service providers, waiting days and incurring high costs. This represents two different visions of scale and accessibility in the financial industry.

Policymakers should allow identity verification to be completed once and reused across institutions, with customer consent and timely updates. Existing banking rules already allow limited reliance on another financial institution's identity verification process. We should expand this practical reliance mechanism, clarify responsibilities and legal liabilities, and promote the establishment of identity credentials that can be used across different service providers, disclosing only the information necessary for transactions.

Service providers still need to be responsible for assessing risks and monitoring suspicious activities. However, routine identity verification should be reusable, and additional scrutiny should be based on actual risks. Repeatedly collecting the same sensitive documents increases costs and creates more copies of information that need protection.

Lowering the cost of account opening will make it easier for investors to compare service providers, allow new companies to compete for customers, and enable businesses to obtain capital more easily. When customers only need to prove necessary information without having to provide more than what is required for the service, privacy and competition can mutually reinforce each other.

Making Digital Currency Practical in Daily Life

The right to use assets must be feasible in daily life. Buying dinner or paying for a regular service should not require customers to calculate taxes like a tax accountant. Under current U.S. tax law, using digital assets for consumption may require calculating and reporting capital gains or losses. This administrative burden can hinder the everyday use of digital assets.

Policymakers should establish reasonable small exemptions for ordinary digital asset payments. Setting a single transaction limit at $20 or $200 is not suitable for modern business activities. A family meal can easily exceed $200. Calling this token payment limit financial freedom falls far short of meeting citizens' needs to participate in the digital economy.

Specific design is important. A threshold based on taxable gains is not the same as limiting purchase amounts. The exemption amount should be sufficient to cover ordinary consumption and adjusted for inflation; it should also be simple enough that qualifying payments do not require cumbersome calculations and records for each transaction.

Tax exemptions and government reporting thresholds address different issues. Both should respect citizens' time and align with the economic realities of daily life. An asset that can be transferred instantly but requires hours of paperwork does not fulfill the promise of digital currency.

Building a Financial System Usable by AI Agents

We are moving toward an economy where software will take on more of the work that previously required people to complete through phone calls, websites, and face-to-face interactions. AI Agents will increasingly be responsible for research, negotiation, procurement, and collaborating with other Agents.

Such an economy requires a financial infrastructure that can operate continuously. Currency and capital must keep pace with software, available 24 hours a day, 365 days a year.

The traditional financial system is organized around human identity, human interfaces, and human working hours. As individuals and businesses delegate more tasks to AI, they will need practical ways for Agents to trade on their behalf. This means the need for digital wallets, programmable payments, transferable assets, and financial services that software can access directly.

Bitcoin and other digital assets are naturally suited for such an environment. An Agent operating on the internet needs to be able to identify and use capital in a digital manner. It cannot move a gold bar at the speed of light, nor can it wait months to complete a real estate transaction every time resources need to be allocated.

Artificial intelligence will scale up production activities. Digital assets can finance these activities and help coordinate resources. I expect that many innovations in the next wave will emerge from the intersection of the two.

Prioritizing Technological Capability at the National Level

AI brings both opportunities and risks. Some will use powerful technology for harmful purposes. The way to address this is to ensure that responsible individuals, businesses, and public institutions have the capability to protect themselves.

If adversaries use AI Agents, effective defense may require a more powerful Agent. A country that limits its own technological development cannot expect its opponents to accept the same limitations.

We understand this principle in the air, space, and cyber domains. National security depends on the ability to develop and deploy advanced technologies.

The United States should ensure that the public, businesses, schools, and public institutions have access to the best tools. We should help students learn with AI and assist entrepreneurs in building their businesses with AI. Being able to solve problems more effectively is one of the reasons for developing technological potential.

Technological leadership requires broad participation. Every capable person we empower will become another source of innovation, productivity, and resilience.

Allow Regulatory Agencies to Take the Lead Within Their Authority

In the next two years, I believe that the most promising path to greater freedom for digital assets lies with the SEC, CFTC, Treasury, and the White House.

The SEC should make capital raising and tokenized securities more practical and accessible. The CFTC should promote competition in the digital commodities and derivatives markets. The Treasury and banking regulators should establish practical pathways for custody, credit, payments, and the integration of digital capital into financial institutions. The White House should coordinate national development directions, support innovation, and maintain economic leadership.

Agencies should act within their legal authority to eliminate unnecessary barriers and establish clear development pathways for new products. When legislation is needed, Congress should expand the rights of individuals and businesses.

I believe that the approach to the CLARITY Act emphasizes restrictions too heavily. Any proposal should be measured by what people can create, own, transfer, and use once it is enacted.

A lengthy and detailed law that protects existing intermediaries by restricting the practicality of new assets may still fail to provide a solid foundation for prosperity. If certainty prevents beneficial innovation, its value is limited.

Creating Products That Ensure Lasting Freedom

One reason to support comprehensive legislation is that such laws can protect the industry from future hostile government crackdowns. This is a reasonable goal. However, if a law stifles most of the industry's potential from the outset, the cost of such protection is high.

Freedom has another lasting safeguard: practical products that people cannot do without.

In Washington, it is not easy to advocate for products that do not yet exist and have no customers. Once millions of people start using a product to save money, finance businesses, or improve their lives, its value becomes concrete. At that point, customers have a vested interest worth protecting.

The industry should create excellent products, bring them to market, and gain user support. Policymakers should allow space for the industry to grow. As the market develops and real issues emerge, we can continuously refine the rules.

I believe that digital assets can develop into a trillion-dollar industry. To realize this potential, millions of individuals and businesses need to explore better ways to create and organize capital.

Empower them to create, issue, custody, transfer, and use digital assets. Let them enhance the practicality of these assets through competition. This is how we create wealth and prosperity in the intelligent age.