Are Countries Using Bitcoin to Buy Commodities Off the Books?
The question of whether nations are secretly using Bitcoin and other cryptocurrencies to purchase commodities outside official channels has become increasingly relevant in our modern global economy. To understand this phenomenon, we need to examine what we know about government cryptocurrency holdings, the regulatory landscape across different nations, and the practical realities of how countries might use digital assets in international trade.
Government Bitcoin Holdings and Strategic Reserves
Several countries have begun accumulating Bitcoin as part of their national reserves, though the motivations and scale vary significantly. As of November 2025, countries collectively hold approximately 517,296 Bitcoin, valued at around 47.5 billion dollars, representing about 2.463 percent of all Bitcoin in existence. This is a substantial amount that demonstrates governments are taking cryptocurrency seriously as a store of value.
El Salvador stands out as the most prominent example of a nation embracing Bitcoin at the governmental level. In 2021, El Salvador became the first country to adopt Bitcoin as legal tender alongside the U.S. dollar. The government launched the Chivo Wallet, offering 30 dollars in Bitcoin to citizens who signed up, and has made repeated public purchases of Bitcoin. President Nayib Bukele announced plans for “Bitcoin City,” which would feature no income tax, zero taxes on property, procurement, or carbon dioxide emissions. This represents an open and transparent approach to Bitcoin adoption rather than secretive off-the-books transactions.
The Regulatory Environment and Official Channels
Understanding whether countries use Bitcoin for off-the-books commodity purchases requires examining the regulatory frameworks that govern cryptocurrency use. The global approach to cryptocurrency regulation varies dramatically from country to country, ranging from complete prohibition to enthusiastic embrace.
China represents one extreme of this spectrum. In September 2021, the People’s Bank of China declared all cryptocurrency transactions illegal, citing concerns about financial risk, capital leaving the country, and the high energy consumption of crypto mining operations. People involved in illegal crypto trading can be fined, have their assets confiscated, and face criminal charges, particularly in cases linked to money laundering or fraud. This strict prohibition makes it highly unlikely that China would use Bitcoin for official government transactions.
On the opposite end, countries like Singapore, Switzerland, Germany, and Portugal have created crypto-friendly environments. Singapore is known for low taxes and financial stability, with a favorable tax regime and lack of capital controls that have made it a top cryptocurrency tax haven. Major crypto exchanges like KuCoin and Phemex are based there. Germany considers cryptocurrencies as private money for tax purposes, allowing tax-free gains if held for more than a year. Portugal has been crypto-friendly since 2017, with pro-crypto policies that made it a hub for trading and mining.
In March 2025, Nigeria passed the Investments and Securities Act, which recognizes cryptocurrencies as securities and puts them under the authority of the SEC, demonstrating that regulatory frameworks continue to evolve and formalize cryptocurrency’s role in national economies.
The Reality of Off-the-Books Transactions
The concept of countries using Bitcoin to buy commodities “off the books” requires careful examination. Off-the-books transactions typically refer to financial dealings that are deliberately hidden from official records and tax authorities. While this might theoretically be possible with cryptocurrency due to its pseudonymous nature, several practical and political factors make this unlikely for official government transactions.
First, government transactions at the scale necessary to meaningfully impact commodity purchases would be extremely difficult to hide. When a nation needs to purchase significant quantities of commodities like oil, minerals, or agricultural products, these transactions typically involve large volumes and multiple parties. The blockchain nature of Bitcoin means that while wallet addresses are pseudonymous, the transactions themselves are permanently recorded and traceable. Any sophisticated financial investigation could potentially link large Bitcoin transfers to their ultimate recipients.
Second, most countries that might be motivated to use Bitcoin for commodity purchases are already operating within increasingly transparent international frameworks. Even nations facing sanctions or international pressure typically conduct their major commodity purchases through established channels, albeit sometimes through intermediaries or alternative payment methods.
The Iran Connection
Iran provides an interesting case study in this discussion. Almost 13 percent of Iranians own cryptocurrency as of 2023, mostly because they are looking for ways to dodge high inflation, a shaky currency, and sanctions that make regular financial options tricky. Bitcoin and Tether are especially popular since they feel safer than most other options. However, this represents individual adoption rather than official government policy for commodity purchases.
While Iran faces significant international sanctions that restrict its ability to conduct normal international trade, there is limited evidence that the Iranian government is systematically using Bitcoin to purchase commodities off the books. Instead, Iran has relied on alternative payment systems, barter arrangements, and relationships with countries willing to trade despite sanctions.
The Emerging Markets Perspective
Countries like Pakistan, Vietnam, and India show high levels of cryptocurrency adoption among their populations. Pakistan has over 40 million cryptocurrency users and an estimated annual trading volume exceeding 300 billion dollars. Vietnam consistently ranks as one of the most active countries in cryptocurrency ownership. India ranks first in the world for cryptocurrency adoption in 2024. However, high individual adoption does not necessarily translate to government use of Bitcoin for commodity purchases.
These countries are more likely to be exploring cryptocurrency as a tool for financial inclusion, remittances, and economic development rather than as a mechanism for conducting hidden government transactions. The Pakistan Virtual Assets Regulatory Authority, formed in July 2025, began inviting expressions of interest from crypto firms seeking to become licensed in that jurisdiction in September 2025, indicating a move toward formal regulation rather than off-the-books activity.
Mining Operations and Government Involvement
Some countries have positioned themselves as cryptocurrency mining hubs, which provides another angle on government involvement with Bitcoin. Kazakhstan accounts for one-fifth of the world’s Bitcoin mining and offers a favorable legal environment with a 15 percent tax rate for cryptocurrency income or income derived from mining. Georgia has emerged as a go-to jurisdiction for Bitcoin miners due to an income tax exemption on any profit received from the sale of cryptocurrency and no legislative restrictions. Iceland is home to some of the largest Bitcoin mining facilities due to low energy costs and abundant clean geothermal energy.
While these mining operations generate Bitcoin that could theoretically be used by governments, they are primarily commercial enterprises rather than government-controlled operations designed to accumulate Bitcoin for commodity purchases.
The Practical Limitations
Several practical limitations make large-scale government use of Bitcoin for off-the-books commodity purchases unlikely. First, Bitcoin transactions, while pseudonymous, are not truly anonymous. Sophisticated blockchain analysis can often trace transactions and identify patterns. Second, most commodity sellers, particularly those dealing in large quantities, require reliable payment methods and verification. Bitcoin’s volatility and the technical requirements for secure transactions make it less practical than traditional payment methods for major commodity deals. Third, governments that need to hide transactions are typically already using established alternative methods like cash, gold, or barter arrangements that have been refined over decades.
The Transparency Trend
Interestingly,