Can the US afford to lose the crypto race? (Opinion)
By the end of World War II, the United States found itself in a prominent position in the global economy. For decades and generations after that time, its national security has depended on petrodollar hegemony.
The standardized use of the dollar for international trade in petroleum and other raw materials ensured a constant demand for the currency. This unrelenting massive global demand for US dollars became a generational subsidy. It allowed the central bank to print more of them to make money on US debt, public and private.
De-dollarization accelerates the cracks in the Petrodollar
But the easy years of American monetary dominance over the world via the petrodollar are coming to an end. An April 5 entry in the politically radical but ideologically diverse Compact Mag describes the extent of the changes:
“De-dollarization – that is, the decline of the dollar’s status as a global reserve currency – was once a fanciful dream, but it is now rapidly becoming a reality.”
Among the signs of it are:
- Saudi Arabia announced its openness to accepting yuan for oil exports to China in mid-March
- China and Brazil announced an end to the use of the dollar in their bilateral trade relations a week later
- ASEAN finance ministers meet in Indonesia to reduce dollar dependence in March
- France finalized a deal to buy 65,000 tonnes of Russian natural gas from China denominated in yuan in March
Here’s what it means for the US in the crypto race.
The Crypto Race will be as important as the Space Race
The US can no longer enforce dollar reserve trading as the international standard, or in any case it probably won’t be able to for long.
But what it can do is outbid foreign powers and actors to entice everyone to use currencies it dominates by investing heavily in them and letting the market continue to make them so feature-rich, beneficial and easy to use that they are just as irresistible for international retailers like Apple and Google’s smartphone operating systems are for American consumers.
By amassing BTC hash power at the State Department, DHS, Treasury, DOD, DOJ, Commerce Department, and/or the Federal Reserve, the United States can begin to accumulate a scarce digital commodity that will be one of the most consistent reserve currencies in the history of international trade, settlements and money transfers.
