New York, Monday, October 28, 2024- A recent report by the Bitcoin Policy Institute suggests central banks consider Bitcoin as a hedge against rising inflation and geopolitical risks. Authored by economist Matthew Ferranti, the report titled The Case for Bitcoin as a Reserve Asset argues that Bitcoin could serve as a strategic reserve, potentially protecting economies from inflation, sanctions, and banking crises.
Ferranti highlights Bitcoin’s limited correlation with traditional assets, positioning it as a “portfolio diversifier” that may appeal to countries seeking alternatives to the US dollar.
Bitcoin’s decentralized nature also offers advantages, especially for nations facing financial sanctions, such as Venezuela and Russia.
A recent paper by Federal Reserve Bank of Minneapolis argued that Bitcoin complicates government fiscal policies, suggesting that it may need to be taxed or restricted. Similarly, the European Central Bank has raised concerns about Bitcoin’s impact on wealth distribution.
Critics of the ECB’s position argue that such policies ignore broader issues, such as inflation driven by rising public debt.
The study can be seen here.
