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As Bitcoin is crossing total M1 money of few countries, how could a country by adopting Bitcoin as national currency, mutually benefit Bitcoin and the country itself?

https://bitcointalk.org/index.php?topic=154954.0

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So, there may be some benefits to a country with a very troubled currency, but I don't think those benefits would outweigh the drawbacks right now.

Firstly, because the exchange rate of BTC is still too volatile. While an increasing exchange rate may seem like a benefit to us that have some BTC in our wallet, think about someone trying to price a service. Recently I saw a post on the bitcoin subreddit where a coffee shop started accepting BTC. Unfortunately, they had hard coded an exchange rate of 30USD to 1BTC. Resulting in outrageous pricing. Shops that have to change their prices every day is a sign of a troubled currency, even if it prices going down every day.

Secondly, I'm not sure we really have the infrastructure right now to have full commerce in BTC. It's too different than fiat currency. We're moving in that direction, but there just isn't the commerce and banking infrastructure that is built of the eccentricities of BTC. A more likely is a country "pegging" their currency to BTC. But even that is very unlikely, because it would mean that country would be abdicating its control of monetary policy. It's one thing to abdicate that responsibility when you peg your currency to a fairly stable currency like the Euro or the dollar, but pegging it to BTC would be quite the wild ride. The country would have to maintain massive reserves of both its currency and BTC to try to maintain the pegged ratio.

Which leads to my next point. Even though the BTC money supply is getting large, imagine the impact of even a small country moving to BTC. If I were a bank with even $5 billion in deposits that was suddenly mandated to carry my reserve in BTC, I would be in big trouble. That would mean a sudden order to purchase $500,000,000 BTC. The Bitcoin money supply may be getting larger, but there still isn't that kind of liquidity in the BTC exchanges yet.

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