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Coinpaprika 2025-01-24 08:42:39

Coinbase CEO Urges Governments to Hold Bitcoin as Strategic Reserve

Coinbase CEO Brian Armstrong has declared Bitcoin a "better form of money" than gold, citing its scarcity , portability , and divisibility as key advantages. Armstrong believes Bitcoin’s market cap, currently around $2 trillion, could surpass gold’s $18 trillion within 5 to 10 years. He has urged governments to allocate a portion of their gold reserves to Bitcoin, arguing it is a stronger store of value and a more modern asset for strategic reserves. Armstrong’s remarks came after South African Reserve Bank (SARB) Governor Lesetja Kganyago rejected the idea of governments holding Bitcoin reserves. Kganyago questioned Bitcoin’s strategic importance, contrasting it with gold’s historical role as a standard for currency and a trusted store of value. In a detailed post on X (formerly Twitter), Armstrong elaborated on why he believes Bitcoin is superior to gold. He noted that while gold is decentralized and scarce, Bitcoin offers better divisibility, portability, and fungibility. Additionally, he pointed out that verifying the purity of gold is more difficult than verifying Bitcoin transactions, which are transparent on the blockchain. Armstrong also emphasized Bitcoin’s potential for growth, noting that it currently represents only 11% of gold’s market capitalization. He suggested that countries should begin by allocating at least 11% of their gold reserves to Bitcoin, eventually increasing their holdings as Bitcoin's market cap grows. “If the U.S. leads by creating a Strategic Bitcoin Reserve , other G20 nations will likely follow,” Armstrong predicted. He called Bitcoin the best-performing asset of the last decade and urged governments to consider it as a long-term store of value. At the World Economic Forum in Davos, Kganyago dismissed Bitcoin as a reserve asset, comparing it unfavorably to gold’s long-standing significance. He questioned why governments should prioritize Bitcoin over other commodities like platinum or coal, suggesting that it might be more about industry lobbying than strategic value. Kganyago also argued that the decision to adopt Bitcoin as a reserve should involve broader public debate, rather than being driven by market forces. Despite skepticism from figures like Kganyago, the idea of a Strategic Bitcoin Reserve (SBR) is gaining traction in the U.S. Several states, including Wyoming, Oklahoma, and Texas, have introduced legislation to treat Bitcoin as a strategic asset. At least 15 other states, such as Ohio and Pennsylvania, are considering similar measures. Adding momentum to this trend, former President Donald Trump signed an executive order to create a “national digital asset stockpile.” This initiative aims to formalize Bitcoin and other digital assets as part of the nation’s financial strategy. Armstrong remains optimistic about Bitcoin’s future, suggesting it could start as 1% of a country’s reserves and eventually match or exceed gold holdings. He believes Bitcoin’s unique qualities and growth potential make it an essential asset for governments looking to modernize their financial reserves.

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