Bitcoin as a last resort? Murmurs of crypto as reserve currency abound
Cointelegraph
Published Jan 22, 2021 01:00PM ET
Updated Jan 23, 2021 10:00PM ET
Reserve currency is money held by central banks or treasuries usually for international transactions. Argentina is not going to be able to purchase a Boeing (NYSE:BA) 737 MAX passenger jet, for example, with its highly inflationary peso; it will have to pay with U.S. dollars, which is why Argentina keeps dollars on hand — i.e., in “reserve.”
A second basic function is to support the value of a national currency. If the Brazilian real, for instance, plummets during an economic contraction, Brazil’s central bank could bid it up again by purchasing reals with dollars that it holds in reserve.
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Written By: Cointelegraph
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