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My point is that taxes are a key factor in creating demand for dollars.

> the government would still need to exchange those bitcoins for dollars in order to pay its debts

That is not true. The government does not collect taxes to pay its debt, as it can simply spend its own currency which it creates. Taxes are relevant to spending in that it keeps dollars valuable.



> The government does not collect taxes to pay its debt, as it can simply spend its own currency which it creates.

Not if it wants to hit an inflation target.




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