State-financial analysts in China advocate for government-held Bitcoin reserves
The International Monetary Institute (IMI) has recently published a contribution discussing Bitcoin, as a potential reserve asset, marking a significant impetus in strategic considerations about reserves and hedges against geopolitical risks. The paper, originally published by the Bitcoin Policy Institute in October 2024, was written by former US economic advisor Dr. Matthew Ferranti and translated and published on the IMI's WeChat account on May 28th.
The IMI's publication indicates that cryptocurrency is increasingly being seen as a globally relevant asset. Bitcoin, in particular, is suggested as a potential reserve asset for central banks, particularly in developing countries. Reasons for considering Bitcoin as a reserve asset include protection against inflation, geopolitical tensions, bypassing sanctions, and serving as an alternative to the US dollar. The IMI also considers Bitcoin as part of a hedging strategy, including against the risks of U.S. dollar hegemony.
The IMI has written its own note recommending Bitcoin as a new option for reserve assets. The institution believes that Bitcoin's position in the global reserve system deserves sustained attention. Legal experts have emphasized the need for officially recognizing cryptocurrencies as assets, a step that could further solidify Bitcoin's role in the international financial system.
Bitcoin is seen as suitable for long-term value storage for sovereign funds and central banks, and as an inflation hedge in developing countries. However, it is highly unlikely that China will adopt Bitcoin as a payment method or as a replacement for the yuan or the digital central bank currency e-CNY.
The IMI's proposal has sparked debate, with US Intelligence Economist JD Vance seeing China's hostile stance towards Bitcoin as a reason to double down on Bitcoin in the competition with China. Meanwhile, the IMI has also proposed new rules for handling seized cryptocurrencies.
In conclusion, Bitcoin is no longer just a speculative asset. It is now a part of serious debates about the future of the international financial system, with the IMI's publication adding weight to the argument that Bitcoin could play a significant role as a reserve asset. The future of Bitcoin in the global financial system remains to be seen, but its increasing recognition as a potential reserve asset is undeniable.
Read also:
- Trump announces agreement with Chinese authorities on TikTok deal
- Quantum Computing Market in the Automotive Sector Forecast to Expand to $6,462.13 Million by 2034
- Texas finalizes 1.8 billion dollars for the construction of solar, battery, and gas-fueled mini-grids
- List of 2025's Billionaire Video Game Moguls Ranked by Fortune
