American Adversaries Are Looking to Weaponize Cryptocurrencies, New Report Claims

Iran, China, Venezuela, and Russia are looking to cryptocurrencies as a means to work around sanctions and/or trading regulations, a new report claims. The FDD argues that these nations plan to leverage cryptocurrencies to circumvent the U.S. dollar. A digital currency pegged to oil, for example, could be near impossible to enforce sanctions against, the report claims.

U.S. Adversaries Plot an Alternative to the Dollar

The FDD argues that, as of now, China poses the most significant threat. Although not under sanctions, it is currently in a trade war with the United States which could easily escalate. The most technologically-advanced, China has much sway over world trade and could adopt a ‘digital currency’ to compete with the U.S. dollar. The country has been heavily invested in blockchain technology, piloting many successful government-led programs in the country. China also leads the world in blockchain-related patents, with Alibaba leading the pack globally. However, aside from China, Russia is also working on its own digital currency, the FDD says in its report. With Russia’s plans create a sovereign cryptocurrency out in the open, much of its progress has been in the dark. Over-the-counter trading of Bitcoin in Russia has increased significantly, but it’s unclear who is buying and storing these crypto-assets. This year, there were reports that the country was considering building a cryptocurrency trading center on the border between Russia and China. Iran and Venezuela have also been toying with the cryptocurrency idea. Venezuela, despite being the only country in the world to have issued its own cryptocurrency, has largely failed in its efforts. Pegged to the country’s oil reserves, the cryptocurrency called the ‘Petro’ has largely disappeared from the markets after much speculation last year. Iran, on the other hand, is pushing for its own gold-backed cryptocurrency to circumvent the current crushing sanctions placed on it by the United States.

The Geopolitical World, Reimagined

The current geopolitical order is multipolar, but the flashpoint of global stability remains the U.S.-China relationship. Both vying for commercial dominance, they are engaged in a Thucydides Trap, with China rising as a geopolitical foe of the United States. Naturally, China and its allies are looking to create an alternative to the supremacy of the dollar worldwide. Cryptocurrencies, by offering near-instantaneous transaction speeds, security, and traceability, provide these nations with the means to cultivate economies separate from the United States. Whereas previously countries were forced to peg their economies to the dollar if facing economic catastrophe, with crypto-assets growing in popularity there are now alternatives. It’s also an open secret that Russia and China are mass buying gold, another hedge against the U.S. dollar similar to crypto-assets. The geopolitical order is quickly changing with the leading nations set on a collision course. Through cryptocurrencies, we could very well see the entire rulebook of the global economy be turned on its head as aspiring nations look for alternatives to the U.S. dollar. Do you agree that state-issued cryptocurrencies could upset the supremacy of the U.S. dollar? Let us know your thoughts below.

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