Central Banks can hold up to 2% of their reserves in BTC since Jan 1st, 2025

[boumalo]

It's already been almost a month since The Bank for International Settlements (BIS) decision that Central Banks can hold up to 2% came into effect under their "Prudential treatment of cryptoasset exposures".

BIS initially was planning for a 1%, but when Central Banks asked for 5%, they proposed a 2% as a compromise.

A bank’s total exposure to Group 2 cryptoassets must not exceed 2% of the bank’s Tier 1 capital and should generally be lower than 1%.

Given that Central Banks are already looking into this, let's examine the impact this could have.

Let's be conservative and assume we continue with the proposed 2%, and not the 5% that banks want.

Banks have about $188T:

The value of bank assets worldwide increased gradually between 2002 and 2023, despite some fluctuation. In 2023, global bank assets amounted to more than 188 trillion U.S. dollars, up from 183.2 trillion U.S. dollars a year earlier.

At 2%, this represents $3.76T in Bitcoin. For comparison, the current market cap of Bitcoin is $2.05T.

This, even at 2%, is a game changer for Bitcoin.

If 10% of central banks buy to have 1% of their reserve in btc it's 20 times less needed, maybe not all in btc.

If BTC goes up x3 it's 60times less btc to buy than your calculation

[Kavelj22]

Major countries have begun to consider creating a national reserve of Bitcoin, in light of the historic rise in the value of the world's largest digital currency, which has pushed it to unprecedented levels in recent weeks.

There are calls from important political figures to create a reserve of Bitcoin in many countries such as Poland, Russia, and most importantly the United States, where US President-elect Donald Trump and his allies have repeatedly announced their support for a bill aimed at providing the Federal Reserve with Bitcoin as a strategic asset, and it is expected that they will soon have the opportunity to make this a reality.

[john_egbert]

Major countries have begun to consider creating a national reserve of Bitcoin, in light of the historic rise in the value of the world's largest digital currency, which has pushed it to unprecedented levels in recent weeks.

There are calls from important political figures to create a reserve of Bitcoin in many countries such as Poland, Russia, and most importantly the United States, where US President-elect Donald Trump and his allies have repeatedly announced their support for a bill aimed at providing the Federal Reserve with Bitcoin as a strategic asset, and it is expected that they will soon have the opportunity to make this a reality.

For now, it's all talks. Anywhere it's mentioned, there is work to be done in order to achieve said reserves 

[davis196]

At 2%, this represents $3.76T in Bitcoin. For comparison, the current market cap of Bitcoin is $2.05T.

This, even at 2%, is a game changer for Bitcoin.

I don't think that the central banks around the world are holding 188 trillion dollars worth of assets in their reserves. Maybe you are talking about ALL banks(commercial banks+central banks) holding 188 trillion dollars as assets in their balance sheets.
I find it weird that some central banks are friendly to Bitcoin. I thought that almost all central banks around the world are hostile towards Bitcoin and crypto in general. This news seems very bullish, but I'm a bit skeptical. Any volatile asset should NOT be accepted as a reserve by any central bank. Maybe returning to the Gold standard would be a better option than accepting BTC as a central bank reserve asset.

[kotajikikox]

There are calls from important political figures to create a reserve of Bitcoin in many countries such as Poland, Russia, and most importantly the United States, where US President-elect Donald Trump and his allies have repeatedly announced their support for a bill aimed at providing the Federal Reserve with Bitcoin as a strategic asset, and it is expected that they will soon have the opportunity to make this a reality.

This article called bitcoin a geopolitical asset and I believe it is starting to become truer and true everyday. With certain countries interested in bitcoin, other countries threatened by said countries interested in bitcoin might also take a look at bitcoin themselves to one up other countries so to speak. Bitcoin would be such a huge help to one country's economy and the adoption of bitcoin in a country will definitely boost them forward ahead of other countries. Hence why everyone is now looking into it not wanting to be left behind and wanting to be the first of everything. As investors, this sounds good because this surely gives importance to bitcoin in our countries and allows more freedom to use crypto.

[fikrett]

At 2%, this represents $3.76T in Bitcoin. For comparison, the current market cap of Bitcoin is $2.05T.

This, even at 2%, is a game changer for Bitcoin.

I don't think that the central banks around the world are holding 188 trillion dollars worth of assets in their reserves. Maybe you are talking about ALL banks(commercial banks+central banks) holding 188 trillion dollars as assets in their balance sheets.
I find it weird that some central banks are friendly to Bitcoin. I thought that almost all central banks around the world are hostile towards Bitcoin and crypto in general. This news seems very bullish, but I'm a bit skeptical. Any volatile asset should NOT be accepted as a reserve by any central bank. Maybe returning to the Gold standard would be a better option than accepting BTC as a central bank reserve asset.

If such funds were slowly injected into BTC in the decades to come, it wouldn't be that volatile to not consider it a possibility.
That's my view on it, of course.

[franky1]

At 2%, this represents $3.76T in Bitcoin. For comparison, the current market cap of Bitcoin is $2.05T.

This, even at 2%, is a game changer for Bitcoin.

I don't think that the central banks around the world are holding 188 trillion dollars worth of assets in their reserves. Maybe you are talking about ALL banks(commercial banks+central banks) holding 188 trillion dollars as assets in their balance sheets.

yep it is unrealised valuations on balance sheets, not actual realised cashflow hoarded in bank accounts of real $ reserves

I find it weird that some central banks are friendly to Bitcoin. I thought that almost all central banks around the world are hostile towards Bitcoin and crypto in general.

banks feared investing in bitcoin 2011-~2017 due to all the cybercrime, drug, terror news links... (propoganda) which would put their AML procedures into the headache zone should they invest.
bu the propoganda and also the access and analysis of bitcoin utility has changed their minds and elevated potential AML headaches

This news seems very bullish, but I'm a bit skeptical. Any volatile asset should NOT be accepted as a reserve by any central bank.

bitcoins volatility is based on true economics of a wide ranging mining cost. which then is speculated to a international market

gold also has a wide ranging mining cost. but is smoothed out in OTC trading before then hitting a central market place controlled with market circuit breaks that dont allow it to move fast widely

in short the gold market is not a true economic freemarket operation.. we may see the same for bitcoin ETF markets de-pegging from the BTC standard. like gold did in the 1970's

Maybe returning to the Gold standard would be a better option than accepting BTC as a central bank reserve asset.

central banks plan 20-40 years ahead.. and moon gold mining is approaching where 100tonnes of moon refined gold will by hitting earths docking stations in the next couple decades, causing gold to be less abundant and also cheaper to mine than earth gold. causing a market average drop

[tread93]

There are calls from important political figures to create a reserve of Bitcoin in many countries such as Poland, Russia, and most importantly the United States, where US President-elect Donald Trump and his allies have repeatedly announced their support for a bill aimed at providing the Federal Reserve with Bitcoin as a strategic asset, and it is expected that they will soon have the opportunity to make this a reality.

This article called bitcoin a geopolitical asset and I believe it is starting to become truer and true everyday. With certain countries interested in bitcoin, other countries threatened by said countries interested in bitcoin might also take a look at bitcoin themselves to one up other countries so to speak. Bitcoin would be such a huge help to one country's economy and the adoption of bitcoin in a country will definitely boost them forward ahead of other countries. Hence why everyone is now looking into it not wanting to be left behind and wanting to be the first of everything. As investors, this sounds good because this surely gives importance to bitcoin in our countries and allows more freedom to use crypto.

For investors right now I don't think anyone can have more assurance in any new investment as much as they can with bitcoin being the talk of the institutional and banking world for the past few years and its only increasing their interest and spectacle more and more as time goes on. Bitcoiners should be more bullish now than they ever have been because what we are seeing right now is truely global adoption at the highest level and legit a spotlight on BTC.

[BitJannik]

This 2% limit might seem small but it's a huge step for bitcoin's legitimacy in the financial system. If banks start allocating even a fraction of this, demand could surge, pushing bitcoin further into mainstream adoption. I see this as a major shift that could redefine how instructions interact with crypto.

[fuguebtc]

It's already been almost a month since The Bank for International Settlements (BIS) decision that Central Banks can hold up to 2% came into effect under their "Prudential treatment of cryptoasset exposures".

BIS initially was planning for a 1%, but when Central Banks asked for 5%, they proposed a 2% as a compromise.

This news is not new, it has been announced since 2022 and according to the news BIS allows banks to hold 2% of their reserves, not just the central bank and the central bank does not require 5%. Additionally, BIS allows banks to hold cryptocurrencies but whether or not to hold bitcoin/crypto is up to the individual bank to decide. BIS has no authority to intervene or require banks to hold bitcoin and unfortunately so far: the US Central Bank (Fed) has stated that it has no intention of adding bitcoin/cryptocurrencies to its reserves. Similarly, the European Central Bank (ECB) also made a similar statement, bitcoin does not qualify for inclusion in reserve assets.

Central banks are still very cautious about crypto, they are not as crypto friendly as you say.


https://www.investing.com/news/cryptocurrency-news/bis-allows-banks-to-hold-2-of-their-reserves-in-cryptocurrencies-2966647

[FortuneFollower]

This 2% limit might seem small but it's a huge step for bitcoin's legitimacy in the financial system. If banks start allocating even a fraction of this, demand could surge, pushing bitcoin further into mainstream adoption. I see this as a major shift that could redefine how instructions interact with crypto.

As it was said by fuguebtc, they are still very cautious about crypto and BTC in general, so it's obvious that all of the banks would go and try to interact with BTC right away.

Maybe it will start from the smaller banks, and then hop on to the bigger ones.