The board of directors of Microsoft has recently issued a clear recommendation to its shareholders: vote against a proposal to evaluate Bitcoin as a potential diversification asset and hedge against inflation.
This suggestion, submitted by the National Center for Public Policy Research (NCPPR), a conservative think tank, highlights the supposed advantages of Bitcoin in the face of increasing inflationary pressures. The debate is scheduled for the annual shareholders’ meeting, which is set to take place on December 10th.
Investing in Bitcoin to counter inflation of Microsoft’s assets: the NCPPR initiative
The NCPPR proposes an evaluation of Bitcoin as a diversification tool for Microsoft, arguing that it would be an effective hedge against inflation, if not the best one. The think tank emphasizes the potential for Bitcoin to strengthen the cash assets of large companies, even suggesting that Microsoft should allocate at least 1% of its total assets to this cryptocurrency.
In their argumentation, the NCPPR highlights the volatility and erosion of purchasing power associated with fiat currencies, a risk that Bitcoin is better prepared for according to them. This position is also in line with the broader conservative plan called ‘Project 2025’, which seeks to reform certain financial institutions and redefine economic strategies, in part through the adoption of Bitcoin by businesses.
The response of Microsoft to Bitcoin: cautious management and ongoing examination
In a filing with the Securities and Exchange Commission (SEC), Microsoft stated that the board of directors opposes this proposal, emphasizing that the company is already exploring the possibility of investing in BTC and considering its financial management processes to be robust and diversified enough. Microsoft also assures that it closely monitors market developments and trends related to cryptocurrencies for future decisions.
The technology giant has highlighted the risks associated with the volatility of Bitcoin, a factor to be taken into account in a context that requires stability and predictability for the management of its treasury. According to Microsoft, the primary objective remains to ensure reliable liquidity to support the company’s long-term operations.
It is worth noting that Vanguard, BlackRock, and State Street are among the main shareholders of Microsoft, with varied positions regarding investment in digital assets.
A mixed support from major shareholders
Microsoft enjoys the support of its main shareholders, including Vanguard, BlackRock, and State Street, who are generally cautious about investments in cryptocurrencies. While these asset managers have each initiated exploratory strategies on digital assets, they remain attentive to the risks that accompany such widespread adoption.
A proposal revealing tensions surrounding the adoption of Bitcoin in business
This request to integrate bitcoins into corporate reserves highlights contrasting opinions on the use of cryptocurrencies in large companies. With Bitcoin supporters seeing it as a solution to contemporary economic challenges, the NCPPR’s proposal highlights a divide between advocates for a gradual adoption of digital assets and those who favor more traditional and conservative management.
As the December shareholders’ meeting approaches, Microsoft’s decision could serve as a reference for other technology giants observing the evolution of digital assets in business, as a potential defense against persistent inflation and a changing economic climate.
