Part 4/8:
As the economic environment shifts and as potential threats like sanctions loom, central banks are revisiting gold as a dependable reserve asset. Researchers from the World Bank noted that countries imposing sanctions are pushing central banks to reassess their reliance on conventional fiat currencies – favoring gold, which is seen as a more secure option during geopolitical strife. Bitcoin, while also intriguing due to its digital nature, remains hindered by volatility, which has kept major central banks cautious.
When evaluating reserve assets, central banks are primarily concerned with three factors: safety, liquidity, and the ability to generate returns. The U.S. dollar currently scores highest in these considerations.