Fidelity Digital Assets, a subsidiary of Fidelity Investments, published a report earlier this month on crypto trends and their potential future impact. Among the trends discussed in the report is cryptocurrency adoption by sovereign nations. This past year saw some major moves by world governments with regards to digital assets,” Fidelity described. The firm expects more countries to adopt bitcoin this year.
“An outright ban on crypto will be difficult to achieve at best.”
The report discusses countries like China that have banned cryptocurrency and countries like El Salvador that took the opposite approach and made the leading cryptocurrency legal tender. “We think the two developments observed this year couldn’t be more opposed. Time will certainly tell which path is more successful,” the report authors opined. However, they noted that an outright ban would be difficult to achieve at best, and if successful, it will lead to a significant loss of wealth and opportunity.
It wouldn’t be surprising to see other sovereign nations acquire bitcoin in 2022.
The authors opined, “We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” elaborating: “Therefore, even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance.” The investment firm concluded that they wouldn’t be surprised to see other sovereign nations acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition. As reported earlier, El Salvador’s president, Nayib Bukele, predicted that two more sovereign nations might adopt bitcoin as legal tender this year.