By: Luke Xie / Newsweek
Translation: Telegrafi.com
Bitcoin has officially become part of the mainstream.
This digital asset now sits on the balance sheets of public companies, is the foundation of the fastest-growing exchange-traded funds, and has even entered the strategic reserves of governments. The most powerful players in finance are treating Bitcoin as a serious reserve asset.
Now a deeper change is taking place.
Institutions, some of which now hold large positions in Bitcoin, are scrambling to turn their cryptocurrency holdings into working, productive capital. The opportunity cost is too high to ignore.
Bitcoin's intrinsic technical strengths, combined with institutional interest in its success, position it to develop into a core infrastructure that powers global markets.
In finance, no asset remains inactive for long.
Once an asset enters institutional balance sheets, the question that inevitably arises is: How can it be put to work to generate even more income?
Money is lent out to earn interest. Government bonds are used as collateral and are reused in transactions that amount to trillions of dollars every day. Even gold, once simply stored, has become the basis for lending and credit markets.
Bitcoin will follow the same trajectory. It has developed into a reserve asset held by companies, hedge funds, and governments. And yet, most of it just sits there, completely inactive. With investors demanding efficiency from every dollar, the pressure will increase for these holdings to produce value.
Soon, Bitcoin will also be used to lend, borrow, and transact on a large scale, generating returns for lenders and making it easier to settle global transactions. Institutions, motivated by the opportunity cost of their unused Bitcoin, have already begun to develop their operations in cryptocurrency and learn how to interact with this currency.
Once institutions start using – not just holding – their Bitcoin, they will realize that its unique design makes it the ideal foundation for global liquidity.
The best reserves are those that can be trusted, transferred, and appreciated consistently across borders and over time. US Treasuries have long served this purpose because they are liquid, backed by the full faith and credit of the US government, and widely accepted as reliable collateral.
Bitcoin brings a different, but equally powerful, set of features. Its supply is fixed, so it cannot be devalued at will. It is global in nature, moving freely across jurisdictions without the need for banks or clearinghouses. Every unit can be audited in a public ledger, reducing the lack of transparency that characterizes traditional finance. And, unlike sovereign assets, Bitcoin has no risk of default and is not exposed to the fiscal policies or political decisions of a single country.
It is precisely these qualities that once made Bitcoin interesting that now make it particularly well-suited to serve as a liquidity anchor in a digital economy. They position it as a candidate to join — and eventually rival — the assets that currently support global markets.
Institutions are already planning for this future. Some have borrowed using their Bitcoin reserves as collateral, others are exploring Bitcoin as collateral in credit markets, and payment companies are experimenting with instant settlement of cross-border transactions. Because every reserve can be audited in a public ledger, Bitcoin offers a level of transparency rarely achieved in traditional finance—a stark contrast to the hidden leverage that led to the 2008 bank collapse.
The challenge is how to make these early steps sustainable at scale.
One promising way to make Bitcoin truly productive is through Stablecoins. A Stablecoin is simply a digital token designed to track the value of a stable asset (usually the US dollar). Most are backed by cash or short-term government debt.
Bitcoin-backed stablecoins work differently: they use Bitcoin as collateral to issue digital dollars directly on-chain.
The advantages are twofold. First, reserves can be verified in real time, eliminating the lack of transparency that has plagued both traditional banks and early cryptocurrency experiments. Second, because the collateral is Bitcoin rather than cash deposited in a bank, Stablecoins are not exposed to the same risks—such as bank failures, regulatory changes, or hidden leverage. They provide the liquidity that institutions need, without sacrificing the transparency and stability that made Bitcoin valuable in the first place.
This model brings together various experiments (borrowing against reserves, testing transaction settlement, improving transparency) and scales them into a system that can support global liquidity. If Bitcoin-backed stablecoins reach maturity, they will transform billions in unused reserves into working capital, silently supporting the flow of credit and trade.
Bitcoin's rise has often been told as a story of price charts and speculation. But its real significance lies elsewhere. Bitcoin will not be just another asset on corporate balance sheets. It will be the foundation upon which liquidity is built - the new backbone of the global economy. /Telegraph/
