Will it add BTC to nationwide reserves?

Bitcoin’s rise as a worldwide reserve asset

The worldwide push for Bitcoin as a reserve asset is gaining velocity, with the US main the way in which by establishing a Strategic Bitcoin Reserve in January 2025. By March, an government order was signed to start structuring the reserve, signaling a shift in coverage path.

The Strategic Bitcoin Reserve within the US will likely be funded by Bitcoin (BTC) confiscated from prison actions and firm bankruptcies. The Division of Justice (DOJ) and the US Marshals Service will handle these belongings. This motion demonstrates a strategic determination to deal with Bitcoin as a long-term retailer of worth, just like digital gold, somewhat than a short-term asset. 

As of March 2025, the US authorities holds practically 200,000 BTC. Numerous states within the US have allowed their public treasuries to put money into Bitcoin, together with Texas and Arizona. 

Outdoors the US, El Salvador holds over 6,000 BTC as a part of its nationwide reserves, whereas Bhutan has accrued greater than 12,000 BTC by way of eco-friendly hydropower mining, representing practically 40% of its GDP. These actions present a rising international view of Bitcoin as “digital gold,” valued for its restricted provide, transparency and ease of switch. 

Throughout occasions of inflation, forex weakening and geopolitical challenges, Bitcoin’s decentralized and scarce nature is more and more interesting to governments seeking to diversify their reserves. As extra international locations think about its strategic position, the narrative round Bitcoin is shifting from a speculative funding to a reputable instrument for financial stability.

What makes Bitcoin digital gold

Bitcoin is commonly known as “digital gold” as a result of it combines the rarity of valuable metals with the benefits of digital know-how, making it a retailer of worth. Listed here are just a few the reason why Bitcoin earned this identify:

• No central authority: Bitcoin isn’t managed by any authorities, financial institution or firm. Like gold, it’s unbiased of centralized management, which protects it from manipulation.
• A restricted provide of 21 million: Not like conventional currencies or commodities that may be produced endlessly, Bitcoin has a set restrict. It creates shortage and helps its long-term worth.
• Excessive liquidity: Bitcoin may be traded across the clock on international exchanges, offering on the spot market entry. In distinction, gold buying and selling is commonly tied to enterprise hours and bodily logistics, making Bitcoin extra accessible and liquid in actual time.
• Radical transparency: Each Bitcoin transaction is recorded on a public blockchain. This open ledger system offers a stage of transparency that conventional gold markets, usually opaque or personal, can not match.
• Digital versatility: Bitcoin strikes on the velocity of the web. Whether or not you’re sending worth throughout borders or integrating with decentralized finance (DeFi) instruments, Bitcoin capabilities in methods gold merely can’t — no vaults, no bodily transport.
• Market help: With Bitcoin’s value exceeding $100,000 in worth in 2025 and rising acceptance by monetary establishments and even governments, its position as a strategic asset in at present’s monetary system has been solidified.

Do you know? Regardless of banning crypto buying and selling, China nonetheless holds 194,000 BTC from Ponzi schemes like PlusToken, making it the world’s No. 2 governmental Bitcoin holder.

India’s distinctive place on the acceptance of Bitcoin

As international powers discover Bitcoin-backed reserves, India stands at a pivotal second. In such a state of affairs, India is well-positioned to combine Bitcoin with its monetary technique. At a time when apprehensions about international inflation are rising, together with Bitcoin within the nationwide monetary technique has turn into crucial.

Right here is temporary details about numerous parts of India’s financial standing:

• Financial objectives: India has well-defined financial objectives, that are mirrored in its pursuit of a $5-trillion economic system by 2025-2026. The nation has a powerful macroeconomic basis backed by a sound banking system, which has the flexibility to lend.
• Technological objectives: The technological power of the nation is showcased by an 87% fintech adoption fee, surpassing the worldwide common of 67% and a sturdy consumer base of over 650 million smartphone customers. 
• Strategic digital infrastructure: India’s current digital public infrastructure, together with the Aadhaar identification system, Unified Funds Interface (UPI) and e-RUPI, already helps real-time, cashless and identity-verified transactions. This infrastructure may very well be prolonged to help Bitcoin integration at scale, probably positioning India as a worldwide chief in safe, regulated crypto infrastructure, very similar to it has with fintech.
• Vitality strengths: India’s concentrate on renewable power, notably photo voltaic and hydro in states corresponding to Gujarat and Himachal Pradesh, respectively, helps sustainable Bitcoin mining. These inexperienced power grids allow eco-friendly mining that’s aligned with environmental objectives, permitting India to pursue Bitcoin accumulation responsibly.

• Coverage and regulation: India’s present 30% tax on crypto positive aspects, 4% cess, 1% tax deduction at supply (TDS) and 18% GST on Bybit spotlight an evolving however unfavorable regulatory framework. As a G20 chief and an Worldwide Financial Fund participant, India has a task to play in shaping international coverage. With the emergence of Bitcoin as a capital asset, India should craft balanced rules somewhat than dismissing it outright.
• Political help: Whereas the regulatory surroundings isn’t but conducive to Bitcoin, some latest statements of political leaders display rising curiosity within the cryptocurrency. Pradeep Bhandari, the spokesperson for India’s ruling Bharatiya Janata Get together (BJP), has proposed a pilot Bitcoin reserve to strategically improve the nation’s financial resilience. Subramanian Swamy, one other distinguished BJP chief, has additionally advocated for India to transition to crypto. India’s Financial Affairs Secretary, Ajay Seth, acknowledged in an interview, “Multiple or two jurisdictions have modified their stance in the direction of cryptocurrency by way of the utilization, their acceptance, the place do they see the significance of crypto belongings. In that stride, we’re taking a look on the dialogue paper as soon as once more.”

Do you know? Bhutan has mined 8,500 BTC utilizing hydroelectric energy for its nationwide reserve; not like most nations, it earned its stash immediately by way of inexperienced mining.

Key dangers and concerns when making a Bitcoin Nationwide Reserve

As Bitcoin positive aspects consideration for nationwide reserves globally, India should rigorously assess important dangers earlier than adopting it as a strategic asset:

• Volatility: Bitcoin’s value can fluctuate sharply. For a sovereign reserve, this volatility introduces potential fairness shocks, notably throughout international or home monetary instability.
• Regulation: Incorporating Bitcoin into reserves requires strong oversight. Clear rules are important to take care of public belief, handle dangers and meet worldwide monetary requirements.
• Vitality and know-how: Massive-scale Bitcoin mining or custody calls for dependable power and superior cybersecurity. Energy outages or weak digital methods may jeopardize operations and reserve safety.
• Environmental issues: Hydropower and photo voltaic power however, unsustainable mining may hurt ecosystems. Complete environmental evaluations are important to keep away from long-term injury to water and forest areas.

Whereas the upside is compelling, a Bitcoin reserve technique in India should be cautious, regulated and environmentally acutely aware to succeed.

Do you know? Sovereign wealth funds and governments globally now maintain about 530,000 BTC (2.5% of the full provide), signaling rising strategic allocation.

What India can be taught from Bhutan, El Salvador and the Bahamas

As India weighs the way forward for digital currencies, whether or not by way of Bitcoin reserves, central financial institution digital forex (CBDC) innovation or regulatory readability, it may draw helpful classes from three small nations which have taken daring, divergent paths: Bhutan, El Salvador and the Bahamas. Their successes, stumbles and structural experiments supply a roadmap for India to maneuver ahead with warning and readability.

Bhutan

Nestled within the Himalayas, Bhutan has quietly emerged as one of the vital forward-thinking international locations by way of Bitcoin technique. Since 2020, it has harnessed its considerable hydroelectric power to mine Bitcoin sustainably. Relatively than promoting the mined BTC, Bhutan has strategically chosen to carry it, accumulating reserves that now reportedly exceed $1 billion, a big share of its GDP.

For India, Bhutan’s method highlights two crucial insights:

1. Leverage renewable power belongings, notably in states corresponding to Himachal Pradesh, Uttarakhand and Ladakh, to mine Bitcoin with a minimal carbon footprint.
2. Use Bitcoin as a sovereign asset — not for on a regular basis transactions, however as a long-term hedge or counter-cyclical reserve.

El Salvador 

In stark distinction, El Salvador made international headlines by declaring Bitcoin authorized tender in 2021. The choice aimed to advertise monetary inclusion, appeal to overseas funding and scale back remittance prices. However the floor actuality didn’t match the ambition.

Adoption by the general public remained low. Authorities-issued Bitcoin wallets noticed preliminary curiosity, largely pushed by a one-time incentive, however every day utilization rapidly declined. Technical issues, lack of digital literacy and value volatility led many to desert the system. Ultimately, underneath strain from worldwide establishments and rising financial pressure, El Salvador rolled again Bitcoin’s authorized tender standing in 2025.

India should take heed: 

• Coverage can not substitute for infrastructure, training or belief. 
• Making Bitcoin a authorized tender with out widespread understanding and safe infrastructure dangers public confusion, capital flight and reputational injury. 
• A reserve-based method, somewhat than a transactional one, could also be much more appropriate.

The Bahamas

As the primary nation to launch a retail CBDC, the Bahamas hoped its Sand Greenback would improve monetary inclusion throughout its many distant islands. However 4 years after its launch, adoption stays extraordinarily low. Most residents and companies proceed to depend on conventional fee strategies or money.

The explanations are instructive:

• There was no clear incentive for customers to change.
• Banks and retailers have been gradual to combine the Sand Greenback infrastructure.
• Public belief in digital forex administration remained weak.
• Authorities efforts to compel adoption, by requiring banks to help it, have been met with resistance.

For India, which is actively piloting its personal CBDC, the lesson is obvious: Digital forex succeeds solely when it provides tangible advantages to customers. Safety, ease of use, service provider integration, privateness protections and public belief should be constructed earlier than scale can comply with.

So, India doesn’t must be the primary to experiment with Bitcoin or CBDCs, nevertheless it should be among the many most considerate. Bhutan reveals the worth of quiet accumulation and sustainability. El Salvador reminds policymakers that boldness with out infrastructure can backfire. The Bahamas demonstrates that digital forex, irrespective of how well-intentioned, should first win the general public’s belief.

By studying from these international pioneers, India can craft a measured, revolutionary and secure method, embracing digital finance not as a raffle however as a well-governed evolution of its financial structure.