Billionaire VC Chamath Palihapitiya Says Bitcoin Can't Be Central Bank Asset

Palihapitiya argues Bitcoin lacks key features for central bank adoption.

Published on Mar. 9, 2026

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Billionaire venture capitalist Chamath Palihapitiya believes Bitcoin will not be held as a reserve asset by central banks due to its lack of fungibility and privacy. He says Bitcoin's public ledger, which allows tracking of coin movements, is a dealbreaker for central banks. Palihapitiya suggests a smaller cryptocurrency with better privacy and fungibility could have a chance, but warns those would be highly volatile.

Why it matters

Palihapitiya's views counter the belief that Bitcoin could eventually be adopted by central banks as a reserve asset. His comments highlight ongoing debates around Bitcoin's suitability as an institutional-grade digital currency and the challenges it faces in gaining mainstream adoption, especially among powerful financial authorities.

The details

Palihapitiya said in a podcast that for a cryptocurrency to be broadly adopted, it needs features that allow a central bank to adopt it. He argued that Bitcoin lacks the necessary fungibility and privacy, which are "deal breakers" for central banks. Palihapitiya noted Bitcoin's public ledger, which allows tracking of coin movements, as a key issue preventing central bank adoption. He added that this likely limits Bitcoin's potential for a tenfold increase, saying it is relegated to ETFs and individual investors.

  • Palihapitiya made these comments in a "People by WTF" podcast episode released on March 2, 2026.
  • The Czech National Bank announced in November 2025 that it had purchased Bitcoin for "a test portfolio."

The players

Chamath Palihapitiya

A billionaire venture capitalist who shared his views on Bitcoin's suitability as a central bank asset.

Matt Hougan

The chief investment officer at Bitwise, who argued that central banks would hold Bitcoin as a reserve asset despite its imperfections.

Czech National Bank

A central bank that announced it had purchased Bitcoin for a test portfolio in November 2025.

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What they’re saying

“If you think about what is the value maximising function right now for a crypto asset to be broadly adopted, it needs to have the features that allow a central bank to adopt it. And there are two things that [Bitcoin] lacks. One is fungibility and two is privacy. And so Bitcoin fails on those two dimensions. So it can never be a structural holding of a central bank.”

— Chamath Palihapitiya, Billionaire Venture Capitalist (People by WTF* podcast)

“Nothing is perfect. And IMO it's far easier to make bitcoin holdings quasi-private than it is to make gold securely non-physical. Central bank adoption is coming. They'll hold both bitcoin and gold. It'll just take time.”

— Matt Hougan, Chief Investment Officer, Bitwise (X)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

Palihapitiya's comments highlight the ongoing debate around Bitcoin's suitability as an institutional-grade digital currency, particularly its ability to meet the needs of powerful financial authorities like central banks. This raises questions about Bitcoin's long-term growth potential and the possibility of alternative cryptocurrencies emerging to fill that void.