Crypto community did not believe the statement about the Bank of Russia investing in BTC, but it still makes sense
Quite understandably, most people did not take seriously the recent statement made by a Russian economist Vladislav Ginko concerning the Bank of Russia and its alleged intention to invest $10 billion in BTC in order to avoid U.S. sanctions. Some, nevertheless, believe that there are still some grounds for such suppositions, as certain influencers in crypto keep on urging governments to substitute gold and government bonds with bitcoin as a new store of value.
Vladislav Ginko, a lecturer at Moscow’s Russian Presidential Academy of National Economy and Public Administration, has recently stated that Kremlin would soon start investing in bitcoins in order to circumvent new U.S. sanctions.
According to Grinko, new sanctions imposed by the U.S. will push Russian elite to diversify its cash reserves by investing in BTC.
Ginko added that the Bank of Russia holds a total of $466 billion of reserves and may at first convert $10 billion of these into bitcoins.
Most observers were openly skeptical about Ginko’s statement, given that cryptocurrencies are not yet regulated in Russia.
But the basic idea behind Ginko’s sayings is far from being absurd. The thing is that bitcoin was conceived as an alternative means of storing value. Whereas fiat currencies are subject to constant devaluation, Bitcoin system is designed to ensure constant BTC price growth. Therefore, the latter is quite capable of substituting other assets as a means of reserve store of value.
Nick Szabo, a well-renown crypto researcher, has recently claimed that central banks might start supplementing their gold reserves with cryptocurrency.
According to Szabo, gold reserves are physically vulnerable, whereas securities require high level of trust. Both these deficiencies might be excluded in case of bitcoin:
“There’s going to be some situations where a central bank can’t trust a foreign central bank or government with their bonds for example. One solution that’s been developed is to have the Swiss government hold it for you – that’s not a trust minimised solution. The Swiss government itself is subject to political pressures and so a more trust minimised solution is cryptocurrency,” – Szabo said.
Such use of bitcoin by any government will, undoubtedly, symbolize the adoption of cryptocurrencies and enhance general confidence in bitcoin. Therefore, the said opinion was positively received by certain members of the crypto community, including CEO of WealthChain Capital Phillip Nunn, who wrote: “Imagine if this happened!”
https://twitter.com/PhillipNunnUK/status/1083026194902249472
Mati Greenspan, senior market analyst at trading platform eToro, agrees with Ginko as well:
https://twitter.com/MatiGreenspan/status/1084766935382966272
As noted by Greenspan, the trend for diversification of fiat reserves is characteristic not only of Russia, but of the U.K. as well.
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