Barbados is Recommended to Use Crypto Money as Reserve Currency

News and Analysis
30.11.2015

Former employees of the Central Bank of Barbados have issued a paper titled ‘Should Cryptocurrencies Be Included In The Portfolio Of International Reserves Held By The Central Bank Of Barbados?’ where they suggest that the island’s regulator should consider using cryptocurrency as its foreign reserve. However, according to the authors, the amount of the reserve digital currency should not be too large. The advise itself is what actually matters in this regard.

The paper’s authors note that apart from usual assets for backing fiat currency value, which are usually gold or foreign currency, the Central Bank should also use cryptocurrency, as it has been increasingly employed in international transactions during past few years.

One of the authors of the paper in question is dr. Winston Moore, who now works as a lecturer at the University of the West Indies. The other one is Jeremy Stephen, who works as a private financial consultant and strategy expert. Both of them previously worked for the Central Bank of Barbados.

“The appreciation in the value of the Bitcoin portfolio (in US dollars) would have also generated a significant return for the Bank However, …as the proportion of reserves held in Bitcoin rises, the volatility of reserves would also increase.” The economists also pointed out that the innovation that is the cryptocurrency is still very much in the early stages of adoption [and] as a result, there are many issues that have to be surpassed, particularly if a central bank will legitimately look at including Bitcoin, for instance, in its reserve mix,” reads the paper.

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