2018 Is The Year When Central Banks Turn To Cryptocurrencies

We all know that behind closed doors, a lot of central banks make the most of the price changes of currencies, buying and selling them along with foreign currencies, marketable securities, gold and special drawing rights. Their main goal is liquidity, security and returns.

According to news, this type of currency trading will likely involve cryptocurrencies – which are likely going to be found on the list of eligible instruments and currencies that backers are allowed to trade. With the growth of cryptocurrencies, we will likely see them on the list of eligible instruments and currencies that central bankers will be allowed to trade.

So, the times are changing and everyone knows that.
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But why is this happening?

The background is really simple. Knowing that one of the core functions of a central bank is to manage their nation-state money, official gold and foreign exchange reserves, the financial stability that comes from these is critical to a nation. While gold is held because it is used as protection against economic events, cryptocurrencies are being looked in the same way.

Experts say that the turning point for central banks will be the point when the bitcoin market capitalization exceeds the value of all SDR’s that have been created and allocated to members (at a value of approx. $291 billion).

Bitcoin already became the biggest international currency in terms of its market cap and its price is continuously rising. This will supposedly force most of the central banks to alter their foreign reserve weightings and at some point invest in a basket of cryptocurrencies.

In the end, we are living in times when cryptocurrencies are fulfilling a new requirement as digital gold – one that everyone should invest in before it is too late (or before the central banks get the most of it).