Key Takeaways
- The Bitcoin Policy Institute advocates for central banks to adopt Bitcoin as a reserve asset.
- The U.S. Bitcoin Strategic Reserve Bill aims to acquire 5% of Bitcoin’s total supply.
- Cardano founder warns of state influence over the Bitcoin network.
A recent paper by the Bitcoin Policy Institute, titled The Case for Bitcoin as a Reserve Asset, makes the argument for central banks to adopt Bitcoin as a hedge against inflation, geopolitical risks, and financial sanctions.
Economist Matthew Ferranti, the paper’s author, highlights Bitcoin’s low correlation with other financial assets, deeming Bitcoin:
An effective portfolio diversifier.
Bitcoin similar to gold
Ferranti points out that Bitcoin, like gold, has value as a hedge against sovereign defaults, particularly in countries facing U.S. sanctions, such as Venezuela and Russia.
He adds that although Bitcoin might not be suitable for all central banks, it shares the same store-of-value properties as gold, especially in the face of rapid currency depreciation.
Stategic reserve
The paper also reflects broader interest among U.S. politicians in using Bitcoin as a strategic reserve.
Wyoming Senator Cynthia Lummis recently introduced the Bitcoin Strategic Reserve Bill, which aims for the U.S. to acquire 5% of Bitcoin’s total supply over time.
Former President Donald Trump also endorsed the idea, hinting at using Bitcoin to help pay off national debt.
