Should Central Banks Hold Bitcoin Reserves and Can It Really Become the New Gold
The global financial system is going through a period of transformation. Geopolitical tensions, sanctions policies, and increasing economic competition between major powers are forcing governments to reconsider the structure of their international reserves. Central banks are increasingly discussing diversification of assets and reducing dependence on the US dollar. In this environment, discussions about the role of cryptocurrencies have intensified. In particular, the question has emerged whether Bitcoin could eventually become part of official state reserves.
Time for Action analyzed the arguments of supporters and critics of this idea and examined how realistic the scenario is in which Bitcoin could compete with gold.
State reserves traditionally consist of foreign currencies, gold, and government bonds issued by the world’s largest economies. The US dollar has remained the key reserve asset for decades. However, geopolitical conflicts and sanctions are encouraging some countries to reconsider the composition of their reserves. One consequence of this process has been a growing interest in gold. Over the past year, the price of the metal has increased by approximately 65 percent. For many countries, gold remains a universal diversification instrument that is not tied to the policy decisions of any particular state. This raises the question: if gold is already used to reduce dependence on the dollar, could Bitcoin serve a similar purpose. The debate intensified after a political initiative by the administration of US President Donald Trump to create a strategic Bitcoin reserve. Following this, representatives of investment banks, the private sector, and the academic community began to discuss more actively the possibility of including cryptocurrency in official reserves. Trump’s nominee for the position of Chair of the Federal Reserve, Kevin Warsh, previously described Bitcoin as a new form of gold. “New gold.”
Bitcoin has one characteristic that attracts the attention of supporters of this concept. It is not controlled by any state or central bank. In a world where competition between major economies is increasing, such a feature appears attractive. Some countries are developing alternative payment systems to reduce dependence on the dollar. China is promoting the international use of the yuan, while Europe is attempting to strengthen the role of the euro in global payments. In this environment, cryptocurrency may seem like an instrument that is not tied to political decisions made by governments. However, the situation also contains contradictions. Active promotion of cryptocurrencies today is taking place in the United States, where the crypto industry plays a noticeable role in financing political campaigns. Experts also note that policies aimed at supporting cryptocurrencies may benefit private market participants.
The strongest argument of critics concerns the volatility of Bitcoin. For a reserve asset, not only price growth but also stability is essential. Within a relatively short period, Bitcoin has experienced significant price fluctuations. Its value dropped from more than 124 thousand dollars in October 2025 to less than 65 thousand dollars. Gold shows a very different pattern. It has served as a monetary asset for thousands of years and has a long history of trust among governments. Financial analysts emphasize that serious historical assessments of an asset usually require decades or even centuries of statistical data. Bitcoin has existed only since 2009.
Supporters of Bitcoin often highlight its limited supply. The protocol sets a maximum issuance of 21 million coins. About 93 percent of this amount has already been mined. If the total market capitalization of Bitcoin were equal to the value of global gold reserves, estimated at approximately 30–35 trillion dollars, the price of a single coin could exceed 1.5 million dollars. However, such a scenario remains hypothetical.
Some economists and financial analysts consider the current valuation of Bitcoin speculative. The main argument concerns the absence of intrinsic value. Some experts believe that in an extreme scenario the long-term price of the asset could approach zero. At the same time, a complete disappearance of cryptocurrency also appears unlikely. One reason cited is the role of digital assets in the shadow economy. The size of this segment of the global economy is estimated at more than 20 trillion dollars. If cryptocurrencies were to service even part of these transactions, this could support a significant market capitalization. Under such assumptions, annual transaction activity of around 100 billion dollars could correspond to a network value of about 1 trillion dollars, which would imply a price of roughly 50 thousand dollars per coin.
Another factor that may determine the future of cryptocurrencies is government regulation. Today a large share of activity in the crypto market involves stablecoins digital assets linked to the US dollar. Over time they may be regulated as strictly as traditional banking instruments. If that happens, transactions would become more transparent to regulators. Some users might return to Bitcoin as a less controlled financial tool. However, the widespread adoption of cryptocurrencies also creates new challenges for governments. One of them is the potential reduction of tax revenues if financial transactions become more difficult to track.
The idea of including Bitcoin in state reserves continues to be discussed in financial circles. It is linked to the desire of governments to diversify assets and reduce dependence on individual currencies. However, several factors limit the practical implementation of this idea. High volatility, a short history, and regulatory uncertainty make Bitcoin a risky instrument for central banks. Gold, which has served as a reserve asset for thousands of years, currently has no full alternative. For this reason the debate about cryptocurrencies as part of official reserves continues. Yet for now the most likely scenario is that the primary defensive asset of the global financial system will remain gold.
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