“The pursuit of adopting Bitcoin at the state and central bank levels will continue to expand because Bitcoin adoption today will give them an upper hand against their competitors in the future”, says Fidelity Digital Assets.
A report regarding potential future and trending concerning cryptocurrencies has been published by Fidelity Investment’s sister concern namely “Fidelity Digital Assets”. One of the trends noted in Fidelity’s report was the adoption of digital currencies by sovereign states.
The report noted some landmark moves which were taken by various states against or in favor of cryptocurrencies. For instance, the report duly discussed the banning of cryptocurrencies in mainland China. Second, the report also highlighted the adoption of Bitcoin by El Salvador under a ‘legal tender’. The report pointed out that the decisions taken by China and El Salvador will need time to show whether they were good or bad. However, what China has done will definitely impact significant opportunities for making profits by Chinese investors.
The author of the report then discussed a ‘game theory’ which, according to the author, involves high stakes. The author believes that countries adopting Bitcoin today will have an edge over other states which would adopt Bitcoin in the future. When it comes to competing with other nations, those which have adopted Bitcoin today will be in a better position to compete. The sovereign states which believe that it is worthless to adopt Bitcoin will be forced to have some sort of Bitcoin insurance. But at that time they would be spending more than double the value of Bitcoin today, argues the report.
The report of Fidelity then advises that at least a small portion of wealth should be invested in Bitcoin by all sovereign states. In the end, the report concluded on the expectation that there will be more sovereign states and central banks adopting Bitcoin in 2022.
Meanwhile, the President of El Salvador, Nayib Bukele, too had predicted on 1st January 2022 that further sovereign states are likely to adopt Bitcoins. Since then Tonga, which is also a sovereign state, has shown its willingness for adopting Bitcoin. An official spokesperson of the Tongan Government had revealed that Bitcoin will be legalized by November 2022.
But countries such as Pakistan, India, and Saudi Arabia are keen on banning cryptocurrencies, particularly Bitcoin. Pakistan’s Ministry concerned has been advised by the country’s regulating bank to impose a blanket ban on the use of cryptocurrencies. Meanwhile, India has been exploring the possibility of banning cryptocurrencies and subsequently launching central bank governed digital currency. China, which was a major player in the digital asset industry, too has implemented a nationwide ban on cryptocurrencies. Currently, China is working tirelessly in the mass adoption of the “Digital Yuan”, which is a digital currency backed by its central bank.