Can the US Afford to Lose the Crypto Race? (Opinion)
By the end of World War II, the United States found itself in a position of preeminence 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 commodities ensured a constant demand for the currency. This unrelenting massive global demand for U.S. dollars became a generational subsidy. It allowed the central bank to print more of them to monetize U.S. debts, public and private.
De-Dollarization Is Accelerating The Cracks In The Petrodollar
But the easy years of American monetary dominance over the world via the petrodollar are nearing their end. An April 5th entry in the politically radical but ideologically diverse Compact Mag describes the scope of the changes:
“De-dollarization—that is, the decline of the dollar’s status as global reserve currency—was once a fanciful dream, but it is now quickly becoming a reality.”
Among the signs of that 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 dollars in their bilateral trade relations a week later
ASEAN nation finance ministers meeting in Indonesia to reduce dollar dependency in March
France closed a deal to buy 65,000 tons of Russian natural gas from China denominated in yuan in March
Here’s what it means for the U.S. in the crypto race.
The Crypto Race Will be as Important as the Space Race
The U.S. can no longer enforce dollar reserve trade as the international standard, or anyway, it likely won’t be able to for much longer.
But what it can do is outcompete foreign powers and actors in enticing everyone to use currencies it dominates by investing heavily in them and allowing the market to continue making them so feature-rich, beneficial, and easy to adopt that they’re as irresistible to international merchants as Apple and Google smartphone operating systems are to U.S. consumers.
By marshaling BTC hash power at the State Department, DHS, Treasury, DOD, DOJ, Commerce Department, and/or Federal Reserve, the U.S. can begin to accumulate a scarce digital commodity that will be one of the most consequential reserve currencies in history for international trade, settlement, and remittances.
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