If bitcoin continues to appreciate significantly, it will provide the central bank more flexibility with their monetary policy and international account settlement. But perhaps the real case for central banks owning bitcoin is as insurance against the scenario of it succeeding. Given that the supply of bitcoins is strictly limited, it may be wise for a central bank to spend a small amount acquiring a small portion of bitcoin's supply today in case it appreciates significantly in the future. If bitcoin continues to appreciate while a central bank doesn't own any of it, then the market value of
...more
