Topic: Diversification in Global reserves. - page 3. (Read 639 times)

I think going back to the gold standard is impossible because the amount of money the government has printed is so large, and no government will have enough gold to back the fiat they have printed. Furthermore, it will make it difficult for the government to print money and they will not be able to manipulate things according to their wishes. If I remember correctly, the US government proposed and abolished the gold standard for fiat currencies. And they are using USD to control the world quite effectively, it will not be easy for them to lose this power.

People need to realize that what is good for them may not necessarily be optimal for a government simply because of their scale, and while bitcoin can mean for us a great way to diversify our wealth and our income, the same cannot be said about governments, in which their mere size and magnitude makes impossible for them to invest a significant amount of their reserves in bitcoin.

And the only form of money that has been around for a long time and that is big enough to absorb so much capital is gold.

There will be more of them, it's going to be an exponential adoption just how the price of Bitcoin goes. That's how Bitcoin surprises us and it all started from the few financial institutions, to a few countries and soon, more of them for sure.

Definitely, it's a process whether it will be a gradual process but we're seeing the progress. In terms of adoption and progress, we're seeing that Bitcoin was never stagnant on it. There were even a lot of FUDs that were made about it and they never stop but look at the overwhelming response of the people globally.

Bitcoin could have been in the best position to solve this problem,  but I doubt if Bitcoin will be of choice for now as there are various divergent views about Bitcoin but likely something that will happen in the future.
 
For alternative reasons, they should go back to the gold standard (a gold-backed currency) to escape the current economic crisis we have seen lately causing havoc around the world lately.

Inflation is not the major contributor to the dollar decline but also countries that recently started moving away from their reliance on the US dollar and deals are now done outside the US dollar.

A need to diversify or think of diversification of portfolios into assets that are not inflation-threatened such as Bitcoin, Gold, and real estate for hedging against inflation or as a safe haven is highly encouraged.

It's possible but with the government regulation, I think this will not be an easy option to many government.
Though we can expect some private companies to diversify their assets and investments with Bitcoin since they have the money to do so and we are seeing this already. Some companies are already buying Bitcoin and holding it, they might not release it to the public but for sure they already know what's coming, and the diversification is a must especially now that there's a threat of another global market tragedy.

While it is sensible to not trust another nation with your reserves, the point of "reserves" is having something outside of your own currency, you should have that as much as you possibly can, and then have reserves in something else. This begs the question, if you do not want dollars which is reasonable and I do not mean zero, I mean like do not put %100 of your reserves into dollars, that makes sense however, what else would you like to use? I wouldn't really use bitcoin right now, not for a nation size budget, you can't just buy 100 billion dollars worth of bitcoin, nor should you do that for 5-10 billion neither. Maybe a billion would be fine, but that's it. Gold is the smartest way to go in this deal.

As a side note, on an individual level -- Gold, crypto, real estate are all attractive options if you're someone looking to retain your purchasing power. I would diversify into everything, perhaps leaving crypto as the plurality of your total portfolio if not the majority.

Global reserves operate in the same manner, countries usually bend towards diversification in multiple currencies and some physical assets. Crypto isn't part of the global reserves as of quite yet, maybe some number of decades we'll see countries slowly start incorporating crypto into their balance sheet. As of today, it's not really viable.

I believe that more and more places will start accepting it as well. I know that it's not going to be all that easy but it's going to happen fine and people will start to accept it. That was just two nations so far, I am sure that in 10 years we are going to have 5, and in 20-30 years we are going to have 10-20 nations.

That's how it grows do not expect it to be legal tender in 50+ nations over night, we are going to see more nations but first we need to see these two do fine, and make a profit, and that will happen with the next bull run, and other nations that sees this will take notice and they will start doing it too, it will start with poor nations, but then it will grow bigger and bigger. We need couple decades.

What do you mean by global reserves will worth anything, because not every country is using US as their national reserves, they are also using others assets along with it, like Gold, and others assets. But straight answer to your question about if crypto stands a chance to be use for national reserves and combinedly it would put some value in the global reserves. Then dear, open your eyes and check the dominance or market cap of the BTC only.

And then tell me, if it adds value to the global reserves, or if it give competitions to the market caps of big companies like Apple, Google etc.

BTC only covers the %50+ of the whole crypto market and the only coin that we can use in place of gold, many people think gold is limited on earth but I think opposite, and that's why I say, a country should reserve some funds in BTC as diversification is better than putting all the reserves in gold or US or Yuan etc.

At the moment, cryptocurrencies have no chance, even though they're going to be popular in the future, they're not very popular, and they don't have a lot of momentum on the global market. We the mass operating with bitcoin has no such power to lift it up, dollars still have it stands up to now, when you talk about diversification bitcoin have to be legalised all over the world, each country have to support the operation by purchasing their own Bitcoin to serve as example to the citizens

The existence of cryptocurrency specifically BTC has come to a highly transformation and circulatedly recognized and widely accepted with the potentiality to create and generate its investors income and also proffers diverse financial sources.

There are existing terms behind Cryptocurrency how by, it maintenance and even ascends its global financial investment leads as a digital marking system by its volatilities of uncertainty of the digital currency (BTC) values terms it unassurance commodity for global adherences.

After a long mile crypt currency made its vagrant and  extravagant measures of a big opposition in the international and communities financial sources. Hence there shall be a time probably in the nearest that would consider advancement in creativities such as advanced technologies and the marketing assurance in modernity and of course also tends to aim at its regulatory development.

However, the Cryptocurrency has become an economic threat alarming the public sectors and the banking sectors of adopting cautiousness over the legality of the the coins at the virtue of its decentralization and security being which has warranted a ban of the currencies around some certain countries while some are tending to it's unbanned with a goal to boosten investors value and their returns to enhance the public economy.

So I can categorically state that crypto currency specifically Bitcoin has come to stay and taking it leads on a indefinitely height around the globe of diversities of resource as far as other banned Cryptocurrency in other religions are considering to lift its ban after the foreseeing of the currencies value specially BTC with its potentials of exploring its investors in the digital market markets and more countries are yet to adopt its formidable ability to creat wealths.

The problem is that when dollar lost its value, others didn't gain it, they lost their value as well. You look at dollar today, and it is much worse than what it was just 10 years ago, and a lot worse than 20 years ago, but is it still the strongest currency? It is. That alone is good enough reason to keep supporting dollar over other fiat currencies.

However, if we are talking about crypto, then using dollars as investment makes no sense, doesn't matter if it is stocks or gold or whatever, crypto is by far best asset of them all. This means that the only better investment than anything dollar related, would be just bitcoin. This is my thought, maybe you could find something that is better, but I haven't found one so far.

While it is risky, there's a chance. We've seen the Central African Republic and El Salvador that have made Bitcoin their legal tender. They're just doing it one step at a time and their government are also investing on it since they've understood the nature of Bitcoin.

RMB looking at its year trend, doesn't look good at all. Although the BRICS and other alliances are talking about making their own pegged currency which is China's. I do believe that the US will recover as this is a trade war and the US won't allow itself to fall down. There are just too many conspiracies and emotionally attached videos that are being spread on how they're falling. I don't understand a lot with economics but no doubt that they won't just let their ship sink.

I wouldn't trust my wealth being put in RMB (yuan), the current economy of China isn't really the best one comparing to US even if many claim US lost it's purchasing power which I believe is BS because if it did lose that much, why is it still the most used currency around the globe when it comes to trading goods among countries? I would only trust in diversification when I know that the countries where those currencies comes from have a stable economy and has a real potential to compete against the US dollar in the global market.

You are answering your own question. Crypto cannot be used as a reserve because it doesn't have a stable value/price.
Do you really believe that currency reserves are needed in the fiat money era. The US dollar is a global reserve currency, which means that it is used for backing other currencies, but what is backing the US dollar? The USA simply don't have enough gold reserves. Many countries are holding US Treasury bonds in their reserves. What if the USA stops paying it's debts?
I think that we are moving towards a world, where there won't be any currency reserves. The creation and implementation of CBDCs might be a step in that direction.

If we agree that countries want to start reducing dependence on the dollar and find alternatives, there is no better alternative to the dollar. The Chinese yuan is losing its value, the Japanese yen is linked to the dollar, the Russian ruble is under political pressure and the euro, the pound sterling and the currencies entering the Gulf are affected by the dollar, the Swiss franc and gold are almost the same. The most likely alternatives, but they are not as strong as the dollar or the level of liquidity provided by treasury bonds.
Bitcoin is still in the process of growth, and if it succeeds in reaching good levels, it may be options, but stablecoins will definitely not be.

I don't think the cryptocurrency industry will have a chance of becoming a global reserve asset like gold, as they have no intrinsic value other than being used for speculation, the value of altcoins is purely hype and speculation. But if we just consider bitcoin, it's possible because bitcoin actually provides us with useful utilities and its value is being shaped by real demand. That is shown by the fact that it is becoming more and more popular as organizations and countries gradually want to own it.

Whether Bitcoin can become a world currency is still a difficult question to answer. But for it to become an asset as valuable as gold, we have almost achieved it. I believe that in the future when the economy becomes increasingly unstable, bitcoin will be the asset of top concern next to gold.

First off, it's not just the US dollar that has lost much of its value over the years and decades. All fiat currencies have experienced that without exception. As a matter of fact, here in my country the prices of certain goods and services have already doubled, or even more, just in the past decade or two. That must be a lot worse. And my country's fiat is not even the worst performer in the world.

Let's forget about the gold option today. There are so many reasons gold would fail. In the first place, are we to transact with real gold? No. So what are we going to use? Paper certificates backed by gold? Can we verify the gold reserves which back them? Do we have an assurance that the gold in reserve is in equal amount to that of the credits issued? Would the certificates not be repeatedly used as a collateral?

The features of Bitcoin make it a very good option as a global reserve.

There are just a few nations that have decided to de-dollarize trade their partnership.  Prominent among them is Russia, India,  China, and Dubai. However, some of these nations also have business partnerships with other nations that mandate them to use the US dollars. So these nations have not successfully diversified their trade currency due to the widespread use of the dollar.
The French President just made a political statement which has not been backed with action. France's international trade payment is still heavily dependent on the dollar.
The world needs an alternative currency to compete with the dollar because it has become a tool for economic manipulation and dominance. Poor nations have to spend so much money sourcing dollars to engage in trade. The US and its allies are now using the dollars to punish other nations through sanctions. I don't know much about using gold as an alternative currency but decentralized money like bitcoin will be ideal. We don't need a currency that can be manipulated by any or a few countries. The only challenge bitcoin will pose is its volatility.
 
If the price of bitcoin becomes relatively stable it will be a good alternative to diversify assets. But this will be possible if some powerful nations agree to use bitcoin as their reserve currency. I also thought that instead of the BRICS nation coming up with a new currency, they should have used something decentralized.

Its already true to some extent crypto is held as some store of currency but in reserve terms only 1 or 2 central banks maybe have crypto.   The most famous is El Salvador, maybe if they are successful in their policy it will be there after a dozen or more and we can see it develop into something.  At present the value held is by the people, mostly those who wish to have some reference to global currency which they lack in their national currency.