Bitcoin

Bitcoin Could Be A Tool To Help Central Banks Against Sanctions, From Harvard Research

A Harvard University research highlighted the use of Bitcoin by central banks as a financial hedge against fiat reserve issuer financial fines.

Matthew Ferranti, a Ph.D. candidate in the university’s economics department, examined the possibility of Bitcoin as a substitute hedging asset for central banks to fend off prospective penalties in a working paper titled “Hedging Sanctions Risk: Cryptocurrency in Central Bank Reserves.”

The researcher noted in the report that nations with a higher risk of US sanctions had been raising the percentage of their gold reserves far more than those with a lower risk of penalties. It stated that Bitcoin reserves are the best fallback if these central banks are unable to accumulate enough gold to cover the risks associated with the sanctions.

In addition, the researcher thinks that the possibility of sanctions may eventually encourage central banks to diversify their reserves, raising the value of cryptocurrencies and gold. Ferranti concluded that diversifying reserves and allocating some to both Bitcoin and gold have significant advantages.

Ferranti concludes that the economic sanctions imposed by the West on Russia have permanently altered the considerations for central banks. As a result, US Treasuries, which were once seen as a shelter even by America’s adversaries, are no longer considered sacred.

It is not very novel for everyone to consider buying Bitcoin in case it catches on, even central banks. Ferranti, however, is the first to assess the potential magnitude of central banks’ crypto investments.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

10 minutes ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

16 minutes ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

23 minutes ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

2 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

2 hours ago

Cosmos Developer Interchain Foundation Sold 3000 ETH Today

Cosmos Developer Interchain Foundation sold 3000 ETH from its ICO today, totaling 21,600 ETH sold…

3 hours ago

This website uses cookies.