Bitcoin has not yet been adopted by any other nation as their official currency; although, a number of nations that have been blacklisted may soon do so.
People who are interested in Bitcoin are keeping an eye on the countries that are located in the Gulf in case any of them decide to include the cryptocurrency into their economies.

The author of a report produced during the fifth year of a PhD program at Harvard has encouraged central banks to include Bitcoin (BTC) in their reserves as a means of mitigating the risk of penalties.

A paper written by PhD candidate Mathew Ferranti and published in the journal Cryptography and Blockchain called for governments to include the asset class as part of their reserves. This has caused a bit of a stir among Bitcoin enthusiasts. Ferranti's article, which is titled "Hedging Sanctions Danger: Cryptocurrency in Central Bank Reserves," presents a compelling argument for countries that are at risk of sanctions to keep Bitcoin.

The exploitation of digital assets as a means of circumventing sanctions has been an extremely contentious issue in recent years, with things reaching a fever pitch in the wake of Russia's invasion of Ukraine. In the days that followed the invasion, western nations retaliated against Russia by imposing economic and financial sanctions, which some analysts believe might cause the economy of the country to contract by as much as 6%.

Since then, the Russian central bank and the Russian Ministry of Finance have both declared that they would be considering the use of virtual currencies in order to make international transactions easier.

The report does point out, however, that the increasing centralization of the digital asset business may be a problem for those who wish to use the asset class in order to evade sanctions. Coinbase, Gemini, and Binance gave in to the demands of United States law enforcement officials in March and agreed to disclose any transactions involving sanctioned persons or businesses from Russia.

The topic of the efficiency of sanctions was not addressed in Ferranti's paper; however, it was mentioned that there may be some unintended consequences associated with their use, "such as causing harm to the population of the country that you are sanctioning."

In the great scheme of things, countries in the Gulf are among the nations that have been impacted by sanctions the hardest in the globe. In spite of the fact that they are leaning toward distributed ledger technology (DLT) and digital assets, the nations have been hesitant to accumulate the asset on their balance sheets.

Only El Salvador has approximately 3,000 BTC on its balance sheet at the present; no other country comes close. The United States has imposed a significant number of sanctions on the Central American nation, and its government officials and businesses are subject to stringent embargoes.

Bitcoin is facing tough competition from gold.
According to the paper written by Ferranti, countries that are under sanctions are placing their confidence in gold rather than Bitcoin. He mentions the increase in the number of Gulf nations stockpiling gold but makes the comment that "you can't just turn around and buy $100 billion of gold," which means that some countries might accumulate gold.

According to Ferranti, the most advantageous combination will be to possess both assets so that one can take advantage of the benefits of diversification. Ferranti revealed that he favors governments and central banks investing in gold "because it is five times less volatile" than bitcoin.