PRESERVE AND STRENGTHEN the UK’s Bitcoin Reserve

 Its 61,000 Bitcoin have a current market value in excess of three billion pounds. HMRC research shows that millions of UK citizens currently hold Bitcoin. 

HM Government is duty bound not to pursue policies that will diminish the value of these holdings, and should on the contrary take steps to preserve and enhance the value of the Bitcoin that it holds on the nation’s behalf.

The Free State of Saxony in Germany recently sold its Bitcoin, against the advice of Joana Cotar MP. The amount sold by Germany is now worth c. 270 million dollars more than at the time of sale.  Similarly, Gordon Brown famously sold close to 400 tonnes of the United Kingdom’s gold reserves, crystallising colossal losses that now exceed twenty billion pounds.

The new Labour government should take care not to make the same mistake.

Bitcoin is becoming an asset with strategic geopolitical importance. The United Kingdom has an opportunity to be a leader, not a follower, in this race, but the chance to do so is receding.

The new Administration in the US believes that there is value in the United States having its own strategic Bitcoin reserve. We agree - and furthermore affirm that having such a reserve is just as valuable for the United Kingdom. Bitcoin is an uncensorable monetary asset that cannot be co-opted or confiscated by any other nation state, and would enable the United Kingdom to continue to transact with its trading partners even in the event that all other channels of transaction were closed.

Additionally, it is a hard non-liability money, which like gold requires no backing by any other asset. Holding Bitcoin in the United Kingdom’s reserves as a Treasury reserve asset would digitally complement the nation’s physical gold reserves, themselves sadly diminished following the disposals made by the first Blair administration as noted above. 

The UK has already positioned itself in an advantageous position as the third largest nation state holder of Bitcoin, behind only the United States and the People’s Republic of China. HMG should now consider how best to develop this first-mover advantage into a longer term approach, both maintaining as a Treasury reserve this strategically important holding of a transparent, uncensorable and highly liquid asset and also implementing other policies to cement the UK’s position as a global leader in an emerging industry associated with this new asset class