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NATION STATES:
GAME THEORY
BITCOIN AS A STRATEGIC RESERVE ASSET
Countries are facing growing economic challenges and looking for innovative ways to protect their economies. Bitcoin is emerging as a potential reserve asset due to its unique qualities, such as verifiable scarcity, decentralised security, and resistance to inflation.
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Some countries are exploring or adopting Bitcoin as part of their financial strategies. Its ability to complement or even replace traditional reserves like gold or foreign currencies is driving this interest.
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Game Theory and Strategic Adoption
Bitcoin’s adoption by one nation-state creates a game-theoretic pressure for others to follow suit. When a country adopts Bitcoin, it gains a strategic advantage by securing an inflation-resistant and decentralised asset. This incentivises others to act to avoid being left behind in the global monetary race.
1.
United States: Legislative Moves Toward a Strategic Bitcoin Reserve
In July 2024, Senator Cynthia Lummis proposed the Bitcoin Act, advocating for a U.S. Strategic Bitcoin Reserve, with plans for the Treasury to acquire 1 million Bitcoins over five years as an inflation hedge and dollar-strengthening measure.
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President Donald Trump has also supported integrating Bitcoin into national strategies, highlighting its growing role in financial policy and efforts to position it as a strategic asset.
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These developments underscore Bitcoin’s increasing importance in national economic planning.
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State Legislation: In December 2024, Texas lawmakers introduced a bill to establish a Strategic Bitcoin Reserve. The proposal allows the state to collect taxes, fees, and donations in Bitcoin, holding them for at least five years as a hedge against inflation.
2.
Russia: Legalizing Bitcoin Mining and Proposing a Strategic Reserve
In August 2024, Russia legalised Bitcoin mining, and State Duma Deputy Anton Tkachev proposed a strategic Bitcoin reserve to diversify financial assets and counter inflation and sanctions.
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El Salvador: A Pioneer in Bitcoin Adoption
El Salvador became the first country to adopt Bitcoin as legal tender in September 2021. The move aims to boost financial inclusion, reduce remittance costs, and attract investment.
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The government created a $150 million Bitcoin Trust and developed infrastructure like Bitcoin ATMs and a national wallet, Chivo, to support the initiative. El Salvador has also committed to buying Bitcoin regularly as part of its reserves.
4.
Brazil: Proposed Sovereign Strategic Bitcoin Reserve
In November 2024, Brazilian Congressman Eros Biondini proposed creating a Sovereign Strategic Bitcoin Reserve (RESBit), allocating up to 5% of Brazil's international reserves to Bitcoin. The phased strategy focuses on secure storage and aims to diversify assets while protecting against exchange rate risks and geopolitical challenges.
4.
UAE: *RUMOURED to have accumulated around 300k Bitcoin.
Though not an official announcement, the UAE has apparently been buying a large allocation if Bitcoin.
