Can Bitcoin Play a Role in Deteriorating Global Politics?
Bitcoin is one of the most valuable financial assets in the world, and despite the growth slowing down in recent months, its market continues to expand globally. However, politicians across the globe have had polarizing views on Bitcoin and crypto in general, as some see it as a threat to their sovereign currencies, while others see it as a means to end the dominance of the US Dollar in global trade.
The last two decades have been the most turbulent periods since the end of World War II, and the global political scenario is deteriorating even further. In fact, much like the pre-World War days, the world now seems to be divided into two large factions:
- The Anglo-America Alliance – India, Saudi Arabia, Ukraine, most of Europe
- The Sino-Russian Alliance – Pakistan, Turkey, Iran, and most of the Middle East
However, what’s different in this day and age is that every country is quite capable of military might, and no one remains a permanent friend of the enemy. For instance, Turkey, a NATO ally, has had some rough tussles with Washington, especially as both have opposite stands in the ongoing civil wars in Syria, Iraq, and Yemen.
Most of the countries or their allies are equipped with a nuclear arsenal, which is why it is unlikely that a full-blown battle would occur, especially between powerful countries like the US, Iran, North Korea, China, Turkey, etc. Therefore, as some wise men have been saying for a long time, the next global war will be economic, and not that with guns and bullets.
And the world has seen glimpses of this prediction coming true in the recent past, as the world’s leading superpower, United States of America, has used its influence to make countries amend their decisions. Imposing sanctions on Venezuela, Iran, Turkey, and several other nations is an example of how a bunch of elites can overpower countries that don’t agree with them.
Economically, the disaster of 2008 was a big wake-up call for the common investors, who realized that placing their wealth in the hands of a few powerful individuals and corporations could be absolutely devastating. Names as big in America as JPMorgan and Lehman Brothers were caught in controversies, raising several questions on the integrity of the global financial system, which continue to be unanswered even 12 years after the great recession.
Bitcoin was created in January 2009. In the white paper, the pseudonymous creator Satoshi Nakamoto described Bitcoin as “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
We have seen in the case of Venezuela, how the citizens were able to evade the chronic effects of the US sanctions using Bitcoin as transactional money. The use of BTC also helped them dodge hyperinflation in times where the daily price of BTC bread soar exorbitantly high. Similar examples were found in a few African nations as well.
Cryptocurrency in general, therefore, becomes a threat to US dominance as it can make the sanctions redundant. If the US Dollar loses its dominance in international trade, being the only globally accepted currency, it will indirectly effects the United States to a great extent, not only economically, but also politically.
To have a further understanding of what role Bitcoin can play in the growing political distress, let’s analyze a few modern-day rivalries:
India vs Pakistan: The Sub-Continental Battle
Arguably the fiercest of enemies in the last half a century, the relations between India and Pakistan have further deteriorated in recent times. Both countries have severed almost all kinds of engagements with each other, like sports, trade, commerce, entertainment, etc. While both the countries have shared close ties with the United States, Washington has recently tilted towards India, which is a strategic victory for Delhi. However, Pakistan has received reprise in growing relations with China, Turkey, Iran, and Russia, which is alarming for India, to say the least.
If Pakistan uses Bitcoin to trade with countries like Turkey and China, the influence of the US will begin to ease. However, this is unlikely to happen, since the troubled country is in serious debt and the last thing it would want is to upset America. Therefore, Bitcoin won’t have much of an impact in this region, unless Pakistan decides to go against the US policy and trade with Iran, Turkey, and Russia using any currency the USD.
Turkey & Co. vs Saudi Arabia & Co.: The Middle Eastern Chaos
The Middle East is one of the most turbulent regions in the world, with almost every country engaged in some kind of warfare. For instance, though Syria, Yemen, and Iraq are the warzones, proxy war tactics by Iran, Saudi Arabia, Turkey, and Egypt have particularly been devastating.
The US and Russia have their influences here as well. While Iran and Turkey are backed by Russia, Saudi Arabia, and Egypt are backed by the United States, each having their own interest.
Recently, there have been speculations that Turkey, Iran, Saudi Arabia, and the UAE, the major players in the Middle East, are working on their own cryptocurrencies, which can definitely impact the use of the USD. For instance, if Russia introduces its own cryptocurrency, which is rumored to launch soon, and starts accepting it as trade money for defense equipment exports from Iran and Turkey, the sanctions the US imposed on Iran can become almost redundant. More than anything else, this can inspire other nations to rebel against the US Dollar.
The Chinese Dilemma That Could Turn Anytime
The Chinese government has been staunchly against Bitcoin and has practically made crypto trade almost impossible in the country. However, China still remains one of the biggest crypto mining destinations in the world, while Bitcoin and other crypto are heavily used in the form of peer-to-peer and merchant payments. Other than blockchain, China is also one of the pioneers of the blockchain revolution, with the country filing the highest number of blockchain-based patents last year.
That said, the recent trade war between China and the US proved devastating for the global economy, and China very well knows what future sanctions could do to its own economy. The country has, therefore, shown an interest in exploring ways to bypass the use of USD as for trade, and Bitcoin can prove to be its best bet. Once the country gets over the current Coronavirus pandemic, its biggest target would be to recover the huge financial losses happening due to the mass industrial shut down.
After analyzing this, we can safely conclude that Bitcoin isn’t immediate, but a potential threat to the dominance of the US Dollar, one of the crucial tools that allow the United States to influence global politics. If all the rival countries like Russia, China, and Iran start accepting crypto or Bitcoin payments, we could see a shift in power from the west to the east in the coming decade. So, if you are thinking to invest or trade-in Bitcoin or other cryptocurrencies, then choose a trading platform that is safe & secure. The Bitcoin Evolution is one of the best trading platforms which involves secure and simple processes.
