11% of Central Banks Wants to Invest in Bitcoin as a “Gold Alternative” – UBS Survey


11% of the central banks said they would consider Bitcoin as an alternative to gold, according to the 27th Annual Reserve Management Seminar Survey by Swiss-based UBS investment bank.

This survey “is among the most authoritative depictions of official reserve management activities available,” said Switzerland’s largest bank.

The survey involved 30 major central banks, which revealed that while almost 85% do not expect crypto-assets to replace gold in their currency reserves, about 28% of central banks said they see benefits in Bitcoin and other cryptocurrencies as an uncorrelated asset.

“Uncorrelated asset” was actually the second most popular answer for the central bank’s motivation to invest in cryptocurrencies. The most popular involved learning about the crypto investing process and investment management.

“83% of participants believe that the learning process itself of investing and managing this new asset class would be valuable for their institution.”

While “signaling technical progress of the institution” was the third, “gold alternative (independence from Western financial system)” was yet another common one.

Still, 57% of participants do not expect cryptocurrencies to impact their reserve operations significantly.

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When asked whether they see cryptos replacing gold as a safe haven asset in the future, no one said yes, while the majority (84%) said no, with 16% saying they did not know.

Central banks are not interested in Bitcoin and other cryptos because they are preparing for their own Central Bank Digital Currencies (CBDC).

The survey shows that central banks are becoming optimistic about the outlook for digital fiat, with over 80% saying they expect central banks to develop CBDCs directly accessible to consumers over the next five years.

40% of central banks meanwhile are already testing the programs involving CBDCs.

Survey officials also said that the motivation behind pursuing the digitized version of fiat currencies is to enhance the retail payment system and upgrade the broader financial infrastructure. Also, they expect CBDCs to assist in reducing money laundering and crime.

According to the survey, 46% of respondents indicated that cryptos and CBDCs would coexist, noting that digital fiat won’t replace cryptocurrencies, while 33% believe they will.

Meanwhile, the continuing rise of the share of Chinese renminbi in reserves was highlighted by the study with Massimiliano Castelli, one of the authors of the UBS report, saying it could hit up to 15% of holdings in the next decade.

China is currently leading in the CBDC race and has already run several programs involving DCEP/e-CNY. The latest free e-CNY involved the pre-programmed limit in its usage for specific purposes.

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