Post
Topic
Board Economics
Re: Economic risks of Integrating Bitcoin into a Nation's Official Reserve
by
peter0425
on 04/09/2025, 15:06:55 UTC
Now when talkinng about  about reserves, the first thing that should pop up in our minds is "stability."  That’s why governments keep gold, and foreign currencies like dollars, and other assets that don’t easily swing in price. Now if a nation decides to bring Bitcoin as a national reserve it would immediately face some set of problems. One of which is "volatility," coz Bitcoin’s price tends to swing from time to time. Now Imagine government want to  pay for foodstuff imports or maybe repay international loans, only to find that Bitcoin has dropped in price... That kind of shock could further bring about further crisis instead of solving one.
This is why it’s important that they don’t just have bitcoin as their primary reserve. They know the risks and they accepted it because they know that the benefits can be twofold and they think that the benefits can outweigh the risks. But they should still be prepared regardless.
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So therefore, integrating Bitcoin into a Nation's official reserves may be very difficult  coz  the risks of doing so could outweigh the benefits if not properly handled. Whaat do we think about this?
That is why governments should really study bitcoin really well and not just jump into decisions immediately. They need to have proper understanding and education to be able to incorporate bitcoin well.