Harvard: Central banks should buy bitcoin and hold it in their reserves

Key facts:
The investigation highlights the coexistence between gold and bitcoin in the reserves of a country.
Bitcoin can work for countries with poor infrastructure, said Matthew Ferranti.

Harvard professor Matthew Ferranti suggests that bitcoin could also help nations evade financial sanctions.

Matthew Ferranti, a professor at Harvard University, stated that central banks should hold bitcoin (BTC) reserves in small amounts, according to research he presented a few days ago.

Ferranti finds it reasonable that central banks have small amounts of bitcoin in their reserves. He also points out that those who should have many more BTC are those countries financially sanctioned by great powers such as the United States or the European Union, the study highlights.

The Harvard professor’s research explores bitcoin’s potential to serve as an alternative hedging asset, although he sees gold as providing a more useful sanctions hedge.

“If a central bank cannot acquire enough physical gold to hedge against sanctions risks, the option to hold bitcoin increases even more, suggesting that gold and bitcoin are imperfect substitutes,” the study highlights.

The Harvard professor stressed that central banks would benefit from holding bitcoin and gold in their reserves, during an interview.

In this sense, Ferranti gave as an example that bitcoin could work for countries that have a “very poor infrastructure, that does not have the capacity to store large amounts of gold, or countries whose reserves are so large that they simply cannot buy enough gold,” commented in an interview.

One of the most recent cases that mixes bitcoin and economic sanctions arose after the war between Russia and Ukraine, which caused Moscow to be financially punished by the United States and Europe, a fact reported by CriptoNoticias.

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Now Russia is evaluating the use of the digital asset for foreign trade and bypassing the regulations, in order to comply with its international commitments.