The Bitcoin-Backed Bond: A Civilised Revolution in Public Finance
There comes a moment in every nation’s history when doing more of the same ceases to be prudent and becomes, instead, deranged. Britain, with her £2.7 trillion in public debt, has reached that moment.For decades we have operated on the cheerful superstition that debt need never truly be repaid, merely refinanced. The result is a slow national hypnosis: interest payments consume billions, inflation gnaws at savings, and the public purse resembles a gentleman who insists his overdraft is “all under control” while the bailiffs circle the Bentley.
What is required is not another scheme of fiscal conjuring, but a return to sound money and sound money must be anchored in scarcity, transparency, and discipline. Enter the Bitcoin-Backed Bond, a proposal as radical in its simplicity as the gold standard once was in its restraint.
Imagine the government issuing a five-year Bitcoin-Backed Gilt, identical in structure to any other government bond but different in principle. The proceeds are divided evenly. Half is used for ordinary expenditure or to pay down existing debt, while the other half is used to purchase Bitcoin, which is placed in a National Bitcoin Reserve held transparently under shared custody between the Treasury, the Bank of England, and an independent auditor.
That reserve then sits quietly on the nation’s balance sheet, visible to all, while Bitcoin does what it has done best over time: rise in value as its finite supply meets growing global demand. The government continues to service the bond’s interest payment with a Bitcoin bond each year, raising more bitcoin, and the reserve builds strength in the background.
At the end of the five-year term, the question arises of what to do next. Under the traditional system, the government would sell the asset, pay back the bond, and return to square one. But in this model there is a more intelligent approach. Rather than selling the Bitcoin, the Treasury simply issues a new five-year bond. The proceeds of this reissuance are split in the same way as before, with half used for spending or refinancing and half assigned to Bitcoin. The difference is that the original Bitcoin already exists in the national reserve, so the Bank of England no longer needs to buy more. It simply keeps the existing holding intact.
Over time, each round of bonds adds a fresh layer of value beneath the nation’s finances. The earlier Bitcoin stays in reserve, the newer bonds raise capital, and the whole system begins to resemble a rolling, compounding endowment fund. The UK’s debt is no longer backed by vague promises and future tax receipts, but by a growing, verifiable digital reserve that the world can see and trust.
If the price of Bitcoin were to fall during any period, the Bank of England would have a clear and limited instruction. It could create pounds for the sole purpose of buying additional Bitcoin at the lower price. This turns what would once have been a speculative event into a stabilising one. The Bank becomes a buyer when confidence dips, helping to maintain the long-term price level above the value of previous bond issuances. If prices rise, no action is required. The increase simply strengthens the national reserve and improves the government’s balance sheet.
Through repetition, this cycle of issuance, reserve building, and disciplined management begins to transform the character of national debt. The money printer no longer feeds inflation or political indulgence, it becomes a precise tool for building permanent value. Inflation would not disappear overnight, but over time with the presence of a hard-asset reserve would dampen the government’s temptation to debase the currency. Each round of refinancing strengthens the pound’s purchasing power until the system begins to tilt toward mild deflation rather than perpetual price rises.
It is not an instant cure, but a gradual civilising of money itself. Britain would still experience economic cycles, but the long-term direction would be toward honesty in value, restraint in policy, and confidence in the currency. The result is a nation that grows stronger not through magic or austerity, but through patience, prudence, and proof of work. An economy rarely heals faster than it was damaged. The time it takes to get sick is often the time it takes to get well again.
Such a reserve would act as ballast in the ship of state, a permanent reminder that real wealth derives from productivity, not promises. As Thomas Sowell would say, there are no solutions, only trade-offs. This trade-off replaces invisible inflation with visible accountability. For the ordinary saver, this policy means that money might once again hold value. Pensions, wages, and savings accounts would no longer be quietly pick-pocketed by inflation and start to feel the deflationary effects of progress. A generation accustomed to cynical “spend now” finance might relearn the habit of saving as money in the future would be worth more than it is today.
And for Britain herself, a nation of ledger keepers, engineers, and steady hands, it would re-establish moral seriousness in governance, the sense that stewardship matters more than optics, that one does not spend tomorrow’s inheritance on today’s applause.
The Bank’s new task would be elegantly simple, even BoE-proof, hold the reserve, verify it, and publish it. A triple-custody system could be established. One key with the Bank, one with an independent auditor, and one with a citizen oversight foundation. Every transaction public, every address visible.
A “ReserveCam” dashboard would livestream holdings to the world. Never again could a chancellor quietly melt the nation’s assets into deficit. The watchword becomes: trust, but verify, on-chain.
The City of London built modern finance so should lead in this endeavour and build its digital heir. A Bitcoin-backed gilt would attract global demand from funds seeking sound, transparent, non-fiat exposure, precisely the sort of disciplined innovation that made Britain’s name. This is not an indulgence for the crypto-enthusiast. It is the logical next step for a country seeking credibility in an age when every central bank has printed itself into absurdity.
Sound money is not just an economic choice, it is a moral one. Inflation rewards debt and punishes diligence. It corrodes the bond between generations, the idea that we are trustees of the future, not its exploiters.A Bitcoin reserve does the opposite. It enforces restraint. It teaches governments, as it teaches individuals, that value must be earned and safeguarded, not conjured.
In an Anglofuturist sense, this is the renewal of the British virtue of order through honour, doing things properly, in the open, with a quiet confidence that the best of the world can still be made better.