China's financial experts call for establishment of state-backed Bitcoin reserves by the government
In a significant development, the International Munich Institute (IMI), a renowned research institute focused on monetary finance, has published a paper suggesting Bitcoin as a potential reserve asset for central banks. The publication signifies an important impetus for strategic considerations regarding reserves and hedges against geopolitical risks.
Published on October 28, 2024, the paper outlines reasons why Bitcoin could serve as a reserve asset for central banks. Reasons include protection against inflation and geopolitical tensions, bypassing sanctions, and an alternative to the US dollar. The paper also highlights Bitcoin's suitability for long-term value storage for sovereign funds and central banks, making it an increasingly relevant asset in scientific, financial, and legal circles.
The IMI's recommendation of Bitcoin as a new option for reserve assets is a reflection of its growing importance in the global financial system. It is no longer just a speculative object, but a part of serious debates about the future of the international financial system. The paper, translated and published by the IMI Financial Observer's official WeChat account, states that Bitcoin's position in the global reserve system deserves sustained attention.
However, it is uncertain whether China, where the IMI is based, will support a Bitcoin reserve. China's stance towards Bitcoin remains hostile, according to US Vice President JD Vance, who sees this as a reason to double down on Bitcoin in the competition with China.
Legal experts have also proposed new rules for handling seized cryptocurrencies, including the transfer of such funds into a national crypto reserve. Central banks worldwide are seeking alternatives to the US dollar due to deficits, inflation, and falling real yields, making Bitcoin an attractive option.
Stefan, the author of the article, is a graduate in media studies and sinology, and works independently in the artistic-publishing sector. He is particularly interested in the social and ecological aspects of Bitcoin and Bitcoin mining. The article does not indicate a political shift, but rather a significant development in the strategic discussions regarding reserves and hedges.
It is unlikely that China will adopt Bitcoin as a means of payment or as a replacement for the Yuan or the digital central bank currency e-CNY. However, the IMI sees Bitcoin as a serious reserve asset, stating that its potential as a reserve asset for central banks should not be overlooked.
In conclusion, the IMI's publication marks a crucial step in the recognition of Bitcoin as a globally relevant asset in the realm of reserves and hedges against geopolitical risks. As the debate around Bitcoin's role in the international financial system continues to evolve, it is clear that this digital currency is no longer a fringe concept, but a serious contender in the world of finance.
