A Harvard economics researcher has released a new working paper recommending that central banks around the world start buying Bitcoin.
According to a report by Politico, Matthew Ferranti, a fifth-year doctoral student in Harvard’s Department of Economics, has released a new working paper claiming that central banks should start buying Bitcoin.
The paper, overseen by Ferranti’s Harvard adviser and former IMF economist Ken Rogoff, argues that central banks would benefit from holding a small amount of Bitcoin. The document states that countries facing sanctions, or the potential for economic sanctions, should hold even more Bitcoin as a hedging substitute for gold.
Speaking in an interview with Politico, Ferranti pointed out that countries could use crypto to circumvent sanctions imposed by the United States and other world powers.
However, he argued that gold was the best hedging alternative, saying:
[Gold is] therefore less volatile. It’s like five times less volatile.
Ferranti told Politico that countries would benefit from holding crypto in addition to gold due to the lack of correlation between the two assets and increased diversification. He also noted that countries at risk of sanctions tend to have poor infrastructure and are therefore less likely to be able to obtain enough gold to adequately cover their risk.
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