A clash of ideals is brewing in the crypto world. The prospect of Bitcoin becoming the U.S. reserve currency has raised alarms about potential centralization risks.
In cryptocurrency latest news, Charles Hoskinson, co-founder of Input Output Global and Cardano, has expressed concerns about the potential centralization risks if Bitcoin were to become the reserve asset of the United States, despite it being a positive price catalyst.
This idea was recently proposed by presidential candidate Robert F. Kennedy Jr., who suggested signing an executive order for the US Treasury to purchase 4 million Bitcoin, worth over $242 billion at current valuations. This would represent 19% of Bitcoin’s total supply.
“It’s a mixed bag. On one hand, it would be great for the price of Bitcoin, and it would be great for US regulation of Bitcoin because the United States would be pro-Bitcoin in a certain respect.”
Hoskinson acknowledges the potential benefits, such as a boost in Bitcoin’s price and more favorable US regulations.
However, he warns that the US holding such a significant portion of Bitcoin could lead to unwanted consequences, especially if geopolitical interests come into play. He compares this scenario to concerns that arise when a single entity controls a large share of global assets, like oil, which could lead to market manipulation or cartel-like behavior.
As of August 9, the largest single Bitcoin wallet, held by Binance, contains 1.26% of the supply, or 248,000 BTC worth $15 billion. The exact implications of the US holding a significant portion of Bitcoin remain uncertain, but the potential for centralized control is a cause for concern.
