As disclosed by Cointelegraph, British MP Emma Reynolds has recently made it clear that the British government currently has no plan to adopt strategic Bitcoin reserves. The main reason it gives is the inherent high volatility of Bitcoin, which is contrary to the investment principle that the UK’s foreign exchange reserves have always adhered to.
In the financial sector, the investment in foreign exchange reserves has always pursued stability and security, aiming to ensure the preservation and appreciation of a country’s financial assets and effectively respond to economic fluctuations and external risks when necessary. Since its birth, the price trend of Bitcoin has been like a roller coaster. Take 2025 as an example. The price of Bitcoin fluctuated and declined from its high point at the beginning of the year. On April 7th, it dropped below $75,000 per coin, with a decline of over 10% within 24 hours. However, it rebounded rapidly on April 8th, breaking through $80,000 per coin, with an intraday increase of 1.45%. Such frequent and significant price fluctuations make it difficult for Bitcoin to meet the strict requirements of foreign exchange reserves for asset stability.
Compared with traditional foreign exchange reserve assets, such as major international currencies like the US dollar and the euro, as well as precious metals like gold, their values are relatively stable and have high market recognition. The US dollar, as a major global reserve currency, is backed by the strong economic strength and stable political environment of the United States. Gold, with its scarcity and globally recognized value, has maintained a relatively stable value throughout history. As a virtual cryptocurrency, Bitcoin lacks the support of physical assets. Its value is more dependent on the expectations of market participants and the relationship between supply and demand, which undoubtedly greatly increases investment risks.
This is not the first time that the UK has been cautious about investing in cryptocurrencies. Previously, a spokesperson for the UK Treasury, in response to Protos’ interview, clearly pointed out that compared with other crypto assets, Bitcoin has always been a historically more volatile asset compared to stable fiat currencies and precious metals. This volatility makes Bitcoin unsuitable as a reserve asset for the UK. Although some countries around the world have begun to explore the application of cryptocurrencies in their national financial strategies, for instance, the United States recently decided to establish a strategic Bitcoin reserve and plans to hoard Bitcoin and other cryptocurrencies from criminal and civil confiscations as national assets. However, the British government, considering the stability of its own financial system, still opts to adopt a wait-and-see attitude towards strategic Bitcoin reserves.
In addition, Bitcoin also faces many uncertainties at the regulatory level. Its anonymity and decentralized characteristics, although favored by some investors, also pose huge challenges to regulation and are prone to breeding financial criminal activities such as money laundering and illegal financing. At a time when the global regulatory framework for cryptocurrencies is not yet fully clear, the British government’s cautious approach to Bitcoin investment is also aimed at avoiding potential legal and regulatory risks.
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