Charles Hoskinson Warns of Bitcoin’s Centralization Risks as a US Reserve Asset

The notion of transforming Bitcoin into a reserve asset for the United States poses significant centralization risks for the cryptocurrency, according to Cardano co-founder Charles Hoskinson, as reported by Cointelegraph.

The initiative to potentially use digital gold in such a capacity was proposed by US presidential candidate Robert F. Kennedy Jr., who suggested that the Treasury purchase 4 million BTC.

Hoskinson noted that this would constitute 19% of the asset’s total supply.

“It’s a mixed picture. On one hand, it would be great for the price and regulation in the US, because the country would, in a certain sense, become ‘pro-Bitcoin’,” he believes.

However, the entrepreneur warned that owning such a significant share could lead to undesirable consequences.

“If something happens that the US disagrees with, they could use their geopolitical power to change it, as they have a strategic interest in the asset. So be careful welcoming these people with their power,” Hoskinson said.

He extrapolated the situation to commodities, noting that it is unlikely anyone “would like it if someone bought up 20% of the global oil supply or something like that.”

“So it would be a cartel,” concluded the Cardano co-founder.

Earlier, Republican presidential candidate Donald Trump stated that the US should not sell government-owned Bitcoins. In his view, the country should also become a “mining superpower.”

The politician suggested that the first cryptocurrency could become a key tool in addressing the issue of the growing US national debt, which has exceeded $35 trillion.