While El Salvador cedes custody of its BTC and the United States would do the same, Bhutan exercises direct management of its bitcoins in reserve.
by Paulo Márquez December 25, 2024 Reading time: 9 minutes
bitcoin in an invulnerable bank vault, professional style
Bitcoin custody methods will vary by country. Source: Microsoft Image Creator
Initially, transparency from governments and states about their custody strategies is low.
The need for states could bring new bitcoin custody technologies.
The first government in the world to adopt strategic reserves was El Salvador, a country that has over 5,800 bitcoins stored. Now, it seems that the world is heading towards a new stage of bitcoin (BTC) adoption, and questions arise about the practice of these strategies.
It is known, for example, that the United States already has reserves of the currency, even though Donald Trump promises to further strengthen this governmental strategy during his term. It is also known that Ukraine, the United Kingdom, Georgia, and Bhutan possess them, and there are proposals to do the same in Suriname, China, and even Venezuela.
In light of this international scenario, the question arises: how will countries safeguard their strategic bitcoin reserves?
Initially, the transparency of governments and states regarding their custody strategies is low, at least as of today. These custody practices may even be, in some cases, unsophisticated, considering that many of the bitcoins in the possession of these entities come from digital asset confiscations.
For their part, nations that aim to enter the market by purchasing bitcoin directly will scale their custody methods, as an active and planned safeguarding of the currency requires more sophisticated habits.
How does the first country with bitcoin reserves safeguard its coins?
As reported by CriptoNoticias, it is more than a rumor that the bitcoins in the possession of El Salvador are safeguarded by a third party: BitGo, an American digital asset security and trust company based in Palo Alto, California.