Cryptocurrencies are a big threat to the US in economic terms. However, they also pose a political threat to the global leadership of the United States.
The United States is undisputedly the leader of global politics and is politically involved with every country in the world. While most are its allies, Washington also has several rivals across the globe, on which the United States cannot afford to lose control.
However, the rise of cryptocurrencies seriously challenges this dominance of the US, and therefore, digital currency is a big political threat for the US. Let’s understand how.
Rivals adopting crypto to avoid sanctions
The biggest diplomatic weapon which the United States possesses is a sanction, which it can impose any of the countries which, according to it are a threat. These sanctions are a big blow to the rivals and give the US authorities a big bargaining advantage.
However, the situation might not be the same, as the use of digital currencies will leave sanctions almost futile. The best example is Russia, which will soon be launching its national cryptocurrency, which it plans to use for global trade instead of the US Dollar. Though it sounds impossible, it might not be as difficult if Russia takes efforts to consolidate anti-US forces, which it already seems to be taking.
Another example is the crisis-hit Venezuela, which is pondering for crypto adoption for a long time. Crypto miners in the country have managed to make thousands of dollars, despite the poor economic condition. This has drawn the government’s attention towards Bitcoin, and it is now thinking to make it their reserve token instead of the US Dollar. If that happens, Washington will lose almost all the political influence it has on the country. The bigger problem is that other major countries in South America like Argentina are expected to take the same route.
In short, as countries move towards adopting Bitcoin as a base for global trade instead of USD, American dominance will be seriously questioned.
Consolidation of global powers who have a sour relationship with the US:
Barring a few, countries all over the world, especially in the first world are US allies, but the trend seems to be changing. Old US ally, Turkey, has of late been inclined towards Iran, which is quite alarming. The relations between Ankara and Washington took a toll after the former accused US of giving asylum to Fethullah Gülen, who Turkey accuses to be the mastermind behind the military coup attempt of 15th July 2016.
Of course, the US maintained that Gülen wasn’t involved in it, but the relationship kept deteriorating ever since. This poses a big problem for the US as its major rivals, namely, Iran and Russia, have openly united, and if Turkey joins them, the situation could become even tenser in the Middle East. And if the newly formed alliance adopts Bitcoin or any other common cryptocurrency, things will definitely go from bad to worse.
The rise of Bitcoin value and the emergence of a US alternative will motivate many countries, especially in Africa and Asia, to join the new alliance. These regions are extremely crucial for America from defense and political point of view, in order to maintain global dominance.
Anti-social activities within the states:
Recently, a Spanish drug cartel was busted, which used two crypto ATMs to transfer money from one place to another. What does this have to do with the US politically? Well, a great deal, in fact!
As the world knows it, the United States is among the world’s largest consumers of cocaine, and other narcotics. Most of these drugs are smuggled in the US from South America, but in recent times, the DEA has managed to put a curb on narco-trafficking. The success of this is largely due to the curb on the flow of money and tracking cross-border transfers. Imagine, if drug lords start accepting crypto payments, via privacy coins like Monero or ZCash, everything could go in vain.
Moreover, the dominance of the US in South America is based on the global adoption of USD, and political backing it enjoys across the globe. It is due to this dominance that American authorities were able to compel governments in countries like Columbia to crackdown different cartels in the region. Pretty sure that you remember Pablo Escobar, don’t you?
Now is the US loses even slight dominance in the world; it wouldn’t be able to pressurize governments the way it has been doing. This could lead to rising tension, the end of which could be horrific for the common people.
These were the three major reasons why cryptocurrencies are a political threat to the United States. Apart from these, there are several other effects too, like money laundering, terror funding, tax evasion, etc.