Sources checked 10 November 2026. This page explains what it would take for bitcoin to become a reserve currency or a common way to pay, and what governments, central banks and regulators have actually done. It makes no prediction about prices, adoption or timing, and it is not investment, tax or legal advice. If anything here conflicts with a linked source, the source wins.
Short answer
It is possible in principle, and some first steps exist: the United States has ordered a Strategic Bitcoin Reserve built from forfeited coins, and a few central banks are studying bitcoin. But a reserve currency needs deep, stable and legally recognised markets, and a payments currency needs a stable unit that people are willing to spend. Today the US dollar is still more than half of reported official foreign exchange reserves, no central bank we have found counts bitcoin in its official reserves, the two countries that made it legal tender have since rolled that back, and stablecoins are being regulated as the digital payment option. Whether bitcoin gets further is uncertain. A company does not need to take a view on it to hold bitcoin sensibly.
What a reserve currency is
Central banks and governments hold foreign exchange reserves so they can pay for imports, support their own currency and meet foreign debts in a crisis. A reserve currency is one they choose to hold. The IMF collects the currency mix in its COFER survey. For the second quarter of 2026 it reported total foreign exchange reserves of $13.22 trillion, with the US dollar at 56.70 percent, the euro at 20.60 percent, the Japanese yen at 4.96 percent and the renminbi at 2.11 percent.
The IMF also issues its own reserve asset, the Special Drawing Right. The SDR is not a currency; its value is based on a basket of five currencies: the US dollar, euro, renminbi, yen and pound sterling. It shows that even an official reserve asset is built on existing national currencies.
Source: IMF: Factsheet: what is the SDR?.
What bitcoin would need
| Requirement | Why it matters for a reserve or payments currency | Where bitcoin stands |
|---|---|---|
| Liquidity and safe assets | Reserve managers need to buy and sell large amounts quickly, usually in government bonds that pay interest. | Bitcoin trades around the clock, but there is no bitcoin government bond market and bitcoin itself pays nothing. |
| Legal status | Courts, tax authorities and central banks must recognise it as money, or at least as an eligible reserve asset. | HMRC does not treat cryptoassets as money or currency; the IRS treats them as property. Legal tender experiments have been reversed. |
| Price stability | Reserves exist to be dependable in a crisis; prices and wages need a stable measure. | Bitcoin's value against national currencies moves far more than major currencies do. That cuts both ways for a reserve manager. |
| Unit of account | Prices, contracts and accounts are written in it. | Almost every price, wage and set of accounts is still written in national currency. |
| Payment capacity | Large numbers of everyday payments must settle cheaply. | The base chain is limited by design; Lightning and other layers add capacity. |
| Bank regulation | Banks hold and lend reserve currencies freely. | The Basel standard gives unbacked cryptoassets a conservative treatment. |
Our judgement, not a rule: none of these is fixed for ever, but each one depends on decisions by governments, courts and regulators, not only on markets.
What exists today
The US Strategic Bitcoin Reserve
Executive Order 14233 of 6 March 2025 established a Strategic Bitcoin Reserve, capitalised with bitcoin held by the Treasury that was finally forfeited in criminal or civil proceedings or paid in satisfaction of civil money penalties. The order says bitcoin deposited in the reserve shall not be sold and shall be maintained as reserve assets of the United States. It asks the Treasury and Commerce to develop strategies for acquiring more bitcoin only if they are budget neutral and impose no incremental costs on taxpayers, and it set up a separate Digital Asset Stockpile for other forfeited cryptoassets.
Source: The White House: Executive Order 14233: Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile (6 March 2025), Federal Register: Executive Order 14233 as published (90 FR 11789, 11 March 2025).
Our judgement, not a rule: the reserve rests on an executive order, not on a statute, and we have not found an official published figure for its holdings. A reserve of forfeited coins is also different from a central bank holding bitcoin in its foreign exchange reserves.
El Salvador
El Salvador made bitcoin legal tender alongside the US dollar in 2021. In January 2025, as a prior action for a US$1.4 billion IMF Extended Fund Facility approved on 26 February 2025, it amended the Bitcoin Law: acceptance by the private sector became voluntary, the characterisation of bitcoin as a currency was removed, taxes are paid only in US dollars, and the state no longer guarantees convertibility. At the second and third reviews in October 2026, the IMF said certain performance criteria were not met, including on bitcoin accumulation, granted waivers, and said no further accumulation is envisaged beyond documented donations.
Source: IMF: Press release 25/43: IMF approves a 40 month US$1.4 billion Extended Fund Facility for El Salvador (26 February 2025), IMF: Country Report 25/58: El Salvador, request for an extended arrangement, including the Bitcoin Law amendments (PDF), IMF: Press release 26/316: second and third reviews of El Salvador's Extended Fund Facility (1 October 2026).
The Central African Republic
The IMF reports that the Central African Republic adopted a law in April 2022 giving crypto assets legal tender status alongside the CFA franc, requiring all economic agents to accept them. After the regional central bank and other members of the monetary union raised concerns, the country amended the law in April 2023 to remove legal tender status and guaranteed convertibility. The IMF noted that legal tender requires a means of payment that is widely accessible, and that internet access remained scarce.
Central banks
In November 2025 the Czech National Bank said it had bought digital assets for the first time: a USD 1 million test portfolio including bitcoin, a dollar stablecoin and a tokenised deposit, held outside its international reserves. It said it was not planning to include bitcoin or other digital assets in its international reserves in the near future, and would assess the project in two to three years.
Source: Czech National Bank: The CNB creates a test portfolio of digital assets (13 November 2025).
Bank rules
The Basel Committee's prudential standard for banks' cryptoasset exposures, as amended, is due to be implemented by 1 January 2026. When it was agreed, the Committee's oversight body said unbacked cryptoassets and stablecoins with ineffective stabilisation mechanisms would be subject to a conservative prudential treatment. In October 2026 the Committee said it was carrying out a targeted review of the standard and expected to give an update by the end of the year.
Source: Basel Committee on Banking Supervision: Cryptoasset standard amendments: implementation by 1 January 2026, BIS: Governors and Heads of Supervision endorse global bank prudential standard for cryptoassets (16 December 2022), BIS: Basel Committee meeting, 1 October 2026: targeted review of the cryptoasset standard, update by the end of the year.
Choose your country for the official position at home.
UK: the official position
Our judgement, not a rule: we have found no UK government announcement of a bitcoin reserve. The UK's focus has been on regulating cryptoasset firms and stablecoins. The FCA regime for cryptoasset activities starts on 25 October 2027; see the UK cryptoasset regime from October 2027.
On payments, the Bank of England published its policy statement and draft rules for systemic stablecoins on 22 June 2026. Up to 70 percent of backing assets may be short term UK government debt, with the rest in central bank deposits, and a temporary issuance guardrail of £40 billion will apply to each systemic stablecoin, replacing the holding limits it had consulted on. The FCA has set rules for stablecoin issuance in PS26/10.
Source: Bank of England: Policy statement and draft rules on regulating systemic stablecoins (22 June 2026), FCA: PS26/10: Stablecoin issuance (PDF), FCA: Overview of our cryptoassets regime policy statements (30 June 2026).
US: the official position
The reserve order is described above. For payments, the GENIUS Act (Public Law 119-27) sets a federal framework for payment stablecoins and takes effect on 18 January 2027; the OCC announced a final rule implementing it on 21 October 2026. In other words, the US approach to digital payments runs through dollar stablecoins, while bitcoin is held as a reserve asset of forfeited coins.
Source: Congress.gov: S.1582, GENIUS Act (Public Law 119-27), OCC: News release 2026-92: final rule to implement the GENIUS Act, 21 October 2026.
Bitcoin for everyday payments
The bitcoin white paper describes a peer to peer electronic cash system, with blocks found at a steady average rate. Blocks arrive about every ten minutes on average, and each block has a fixed size limit (since SegWit, measured in weight under BIP 141). That limits how many payments the base chain can settle, so fees rise when demand is high. This is a design choice that favours keeping nodes cheap to run.
Source: Satoshi Nakamoto: Bitcoin: a peer to peer electronic cash system (PDF), Bitcoin BIPs: BIP 141: Segregated Witness (consensus layer).
The Lightning Network moves small, fast payments off the base chain into payment channels that settle on chain when they open and close. It makes low value payments practical, but a business needs channels, liquidity and an online node or a provider. See Lightning for business payments.
Source: Joseph Poon and Thaddeus Dryja: The Bitcoin Lightning Network: scalable off-chain instant payments (PDF), Lightning Network: BOLT specifications (Basis of Lightning Technology).
| Question | Bitcoin on chain | Lightning | Stablecoins |
|---|---|---|---|
| Unit | Bitcoin | Bitcoin | Usually US dollars or pounds |
| Price stability against national currency | No | No | Designed to be stable, if reserves and redemption work |
| Settlement | About ten minutes per block, final after confirmations | Seconds, when a route exists | Depends on the chain and issuer |
| Issuer | None | None | A regulated issuer, under GENIUS in the US and Bank of England and FCA rules in the UK |
| Main risk for a merchant | Fees and waiting | Channel and liquidity management | Issuer and redemption risk |
Why people tend to hold bitcoin rather than spend it
An old idea in economics, often called Gresham's law, says that when two kinds of money circulate together, people spend the one they value less and keep the one they value more. Our judgement, not a rule: if holders expect bitcoin to keep its value better than their national currency, they will tend to pay in national currency and hold the bitcoin. That pulls against everyday spending, and it is one reason the payments case and the savings case for bitcoin can point in different directions.
Scenarios, including that it does not happen
| Scenario | What it would look like | Main obstacles |
|---|---|---|
| No change in role | Bitcoin stays an asset held by some companies, funds and a few governments; payments stay mostly in national currency and stablecoins. | None needed: this is roughly the present. |
| Reserve diversifier | More governments or central banks hold some bitcoin alongside gold and currencies, without using it as money. | Volatility, custody, legal mandates, accounting and reputational risk for reserve managers. |
| Settlement layer | Bitcoin settles larger or cross border payments while everyday prices stay in national currency, with Lightning or other layers in between. | Fees, liquidity, user experience, and competition from stablecoins and faster bank payments. |
| Universal reserve and payments currency | Prices, wages, contracts and reserves are widely written in bitcoin. | Every obstacle in the table above at once, plus the loss of national monetary policy that governments are unlikely to give up. |
| Restriction | More countries restrict holding or using bitcoin, or banks find it costly to touch. | Political and legal choices; prudential rules; the reversals in El Salvador and the Central African Republic show policy can move both ways. |
Our judgement, not a rule: we do not attach probabilities or dates to these, and no one can. A company's policy should work in every row.
What it means for a small company
- Accepting payments. A company can accept bitcoin today without any change in its reserve status. See accepting bitcoin payments.
- Accounts. UK companies apply FRS 102 or FRS 105; see FRS 102 versus FRS 105. US companies within scope apply ASU 2023-08 and measure crypto assets at fair value; see US company bitcoin accounting.
- Tax on spending bitcoin. HMRC does not treat cryptoassets as money or currency, and using tokens to pay for goods or services is a disposal; for a company, a gain is usually charged to Corporation Tax as a chargeable gain. The IRS treats bitcoin as property: paying for a service with bitcoin held as a capital asset gives a capital gain or loss.
- Policy. Headlines about reserves are not a reason to change the limits in the treasury policy. See the policy guide, and keep holdings in a 2 of 3 multisig or with a regulated custodian.
Source: HMRC: CRYPTO41050: Corporation Tax, introduction (cryptoassets are not money or currency; disposals are usually chargeable gains), HMRC: CRYPTO22100: what is a disposal (including using tokens to pay for goods or services), IRS: Frequently asked questions on virtual currency transactions (paying for services with virtual currency), FASB: ASU 2023-08, Crypto Assets (Subtopic 350-60): fair value measurement (PDF).
Common questions
Does the US reserve mean the government is buying bitcoin?
The order capitalises the reserve with forfeited bitcoin and allows acquisition strategies only if they are budget neutral and cost taxpayers nothing extra. Read the order itself for the exact terms.
Is bitcoin legal tender anywhere?
The two countries that gave it legal tender status have since removed the key features: El Salvador made acceptance voluntary in 2025 and the Central African Republic removed legal tender status in 2023, as the IMF reports.
Would a reserve role make bitcoin a better treasury asset?
This page does not say. A company should size and control any holding on its own position, as the sizing guide explains, whatever governments do.
Common mistakes
- Reading a government reserve as a forecast of prices.
- Confusing legal tender with a reserve asset, or a stablecoin with bitcoin.
- Changing the treasury policy because of a headline.
- Forgetting that spending bitcoin is a taxable disposal.
Read next
- Accepting bitcoin payments, invoices, pricing and records.
- Lightning for business payments, fast small payments.
- Bitcoin's future, what companies should watch.
- The halving, the fixed issuance schedule.
- UK crypto regime from 2027, the FCA rules.
- Treasury policy, rules that work whatever happens.
Sources
Primary sources only. Each link was checked on 10 November 2026. Rules change, so confirm the current version with your adviser.
- IMFData brief: Currency Composition of Official Foreign Exchange Reserves (COFER), second quarter of 2026 (30 September 2026)
- IMFFactsheet: what is the SDR?
- The White HouseExecutive Order 14233: Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile (6 March 2025)
- Federal RegisterExecutive Order 14233 as published (90 FR 11789, 11 March 2025)
- IMFPress release 25/43: IMF approves a 40 month US$1.4 billion Extended Fund Facility for El Salvador (26 February 2025)
- IMFCountry Report 25/58: El Salvador, request for an extended arrangement, including the Bitcoin Law amendments (PDF)
- IMFPress release 26/316: second and third reviews of El Salvador's Extended Fund Facility (1 October 2026)
- IMFCountry Report 23/156: Central African Republic, selected issues, including the crypto law and its amendment (PDF)
- Czech National BankThe CNB creates a test portfolio of digital assets (13 November 2025)
- Basel Committee on Banking SupervisionCryptoasset standard amendments: implementation by 1 January 2026
- BISGovernors and Heads of Supervision endorse global bank prudential standard for cryptoassets (16 December 2022)
- BISBasel Committee meeting, 1 October 2026: targeted review of the cryptoasset standard, update by the end of the year
- Bank of EnglandPolicy statement and draft rules on regulating systemic stablecoins (22 June 2026)
- FCAPS26/10: Stablecoin issuance (PDF)
- FCAOverview of our cryptoassets regime policy statements (30 June 2026)
- Congress.govS.1582, GENIUS Act (Public Law 119-27)
- OCCNews release 2026-92: final rule to implement the GENIUS Act, 21 October 2026
- Satoshi NakamotoBitcoin: a peer to peer electronic cash system (PDF)
- Bitcoin BIPsBIP 141: Segregated Witness (consensus layer)
- Joseph Poon and Thaddeus DryjaThe Bitcoin Lightning Network: scalable off-chain instant payments (PDF)
- Lightning NetworkBOLT specifications (Basis of Lightning Technology)
- HMRCCRYPTO41050: Corporation Tax, introduction (cryptoassets are not money or currency; disposals are usually chargeable gains)
- HMRCCRYPTO22100: what is a disposal (including using tokens to pay for goods or services)
- IRSFrequently asked questions on virtual currency transactions (paying for services with virtual currency)
- FASBASU 2023-08, Crypto Assets (Subtopic 350-60): fair value measurement (PDF)
One email. The whole library.
Policy checklist, board paper, recovery drill record, document pack and the rest, in one send. Then one short Thursday lesson for small companies in the UK and the US.
Free. One email with the whole template library, then one short lesson each Thursday. Unsubscribe at any time. See our privacy notice.
This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.
Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.
Using this site does not create an adviser or client relationship. IoT Financial is not authorised or regulated by the Financial Conduct Authority (FCA) and is not registered with the US Securities and Exchange Commission (SEC) as an investment adviser. Read the full disclaimer.