The Good Tech Companies - Governments Hoarding Crypto: Good or Bad Thing?

Starting point is 00:00:00 This audio is presented by Hacker Noon, where anyone can learn anything about any technology. Governments hoarding crypto. Good or bad thing. By Obite, cryptocurrencies were born to challenge the status quo. They're a type of money that doesn't need any central party to work, including banks and governments. For years, this idea attracted technologists, libertarians, investors, and curious newcomers. No one guessed that these assets would become so mainstream, so desirable that even banks and governments worldwide would start hoarding them. As of early 2026, several governments are holding billions of dollars in crypto assets. How did this happen at all? And is it a good or bad thing for our future? Let's see what countries are holding crypto? You're maybe thinking about the new strategic

Starting point is 00:00:46 Bitcoin reserve in the United States or the pioneer in this since 2021, El Salvador. They do have public reserves, yes, but they're not alone. We can start with them, though. The U.S. now possesses largest known government crypto reserves globally, with around 328,000 BTC and other digital assets. At the current Bitcoin price, $68,000-tilda, that's about $22.3 billion. Meanwhile, El Salvador owns at least $7,500 BTC, equivalent to $510 million. As an ironic fact, China, the same country that banned Bitcoin, is holding around $190,000 BTC, $12. 9 billion. The UK has 61,000 BTC, $4.1 billion. Ukraine holds 46,000 BTC, $3.1 billion. Iran just bought at least $507 million in USDT. Bhutan keeps $6,000 BTC, $408 million. Pakistan has revealed their holding,

Starting point is 00:01:50 but not how much, and other countries like Finland, India, and Georgia own more modest quantities. Not to mention we don't know how much Bitcoin really owned the Central African Republic and Venezuela, or if other nations have been secretly buying or minning as well. Bhutan did just that for years before announcing it, if we add up only the public reserves, we would have a total of $43, $9 billion in crypto assets, locked in the treasuries of a handful of governments. Considering the total market cap is around $2.34 trillion, CMC, the previous figure barely represents one. 8% of the market. It doesn't seem like much, but the trend is increasing. Why are countries holding crypto? This could be disappointing, but most governments holding crypto assets aren't exactly

Starting point is 00:02:37 enthusiastic investors. The most common reason behind their ownership is that, over several years, law enforcement agencies have been seizing coins from criminal investigations involving dark net marketplaces, fraud schemes, or even just banned crypto mining. Well, that explains why China has so many Bitcoins, right? It also tells us that even more nations, like Poland, may have some bitcoins somewhere, because they do have crypto seizure protocols. In reality, few nations have provided the status of strategic reserve asset to cryptocurrencies and or are willingly buying or mining. We can count them on one hand, the US, El Salvador, Bhutan, and Pakistan. Others like Ukraine, Nigeria, South Africa, the Czech Republic, Switzerland, Poland, Germany,

Starting point is 00:03:23 Russia and Japan are planning or considering this option to diversify their portfolios or as a hedge against inflation. But so far, few countries have put it into practice. Some other times, and this is at least a minority, certain governments use cryptocurrencies to avoid international sanctions. Given that decentralized assets aren't issued or controlled by any central party, They can't be easily frozen or seized in most cases. They could provide an exit to cornered regimes. The trace is still there, though. For some reason, these governments also insisting using coins with public chains, where all transaction data is available. It's good, but state involvement gives some sense of legitimacy to cryptocurrencies. This sense a signal to large

Starting point is 00:04:06 institutions and individuals alike that this market is no longer a crazy experiment. As a result, custody services improve, regulated exchanges, changes expand, compliance standards mature, education on the topic spreads, and ordinary people feel more confident to hop in. There's also a supply and price angle. Numerous crypto assets, including Bitcoin and G-BY-T-E, have fixed current or maximum supplies. It means only a determined number of coins will ever exist, and no one can create more ever again. This creates scarcity, which is great for prices. The scarcer is an asset, the more valuable. Therefore, when governments lock away sizable amounts in long-term reserves, fewer coins circulate in open markets, which could increase

Starting point is 00:04:50 value. Besides, their purchases can also increase prices. Of course, that also works upside down. Their massive sales can hit prices, too, and their holdings in mining could bring something no one wants in crypto, centralization. In proof of stake, POS, and similar networks, for instance, voting weight depends on token ownership. Research shows that concentrated holdings can influence governance outcomes, like network parameters are key decisions for the future. If a government accumulates enough tokens, its VOTA can outweigh many smaller holders. Mining is another concern. If a state or even an aligned group of them controls more than half of a network's mining power, it could rewrite recent transactions or block new ones. That's called a 51% attack, and it weakens trust in

Starting point is 00:05:37 decentralized systems because one actor gains too much control. It's not exactly a common attack, at least not in big networks where it's too expensive to pull off, but the possibility is still there. So, what's the verdict? State accumulation of crypto is creating a tension between adoption and autonomy. On the positive side, government participation can deepen markets, boost credibility, and help weave digital assets into the fabric of mainstream finance. With that comes better infrastructure and a more mature ecosystem, shaped, in part, by greater scrutiny and regulation. On the other hand, when holdings become concentrated in sovereign treasuries, it introduces new centers of power into systems that were designed to disperse power. Governance decisions, market moves, and policy

Starting point is 00:06:23 shifts could begin tore-shape entire networks from the top down. Some projects, like Obite, are trying to reduce these risks by building architectures without miners or validators, where the power could concentrate, aiming for a more distributed model of control from within the community. In the end, government stockpiling crypto isn't a guarantee of success or a sign that decentralization is failing. However, it is a concerning trend. The more coins a government has, the more power it can acquire on the related network, and the same applies for mining. That's, no doubt, at least a threat of future decentralization. In the best of cases, this is more of a turning point. The technology that once positioned itself outside the state is now being used by it.

Starting point is 00:07:06 How networks respond to that shift will help decide whether digital money keeps ITS distributed character or evolves into something else entirely. Featured vector image by Red Graystock, Freepig thank you for listening to this Hackernoon story, read by artificial intelligence. Visit hackernoon.com to read, write, learn and publish.

The Good Tech Companies - Governments Hoarding Crypto: Good or Bad Thing?

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