The current outlook suggests that the dominance of the US dollar in international business will decline. Meanwhile, Bitcoin strengthens as a global currency and a store-of-value alternative to centralized currencies.
Although people may agree or disagree with the policies of Vladimir Putin, nobody can deny a reality that he recently denounced. He said the US dollar is suffering an increasingly severe crisis of confidence since it has become the money of a few.
Since people no longer want to use money that belongs to others, they clamor for a currency that resists censorship and abuse of power. The leaders of countries sanctioned by the United States now have the same claims that bitcoiners have made for over a decade.
Restrictions imposed by the United States caused Venezuela to create a cryptocurrency pegged to the oil price. They intended to sell the non-renewable resource in currencies other than the US dollar.
Iran followed suit by promoting cross-border cryptocurrency payments and legalizing the mining of crypto assets in the region. They made that move to finance themselves after the economic sanctions imposed by the North American country.
China, one of the leading players in the international market, has also complained about the financial practices of the United States. For that reason, they are promoting the use of the digital yuan (e-CNY) to gain power in that sector.
The Asian country is trying to make trade contracts with Saudi Arabia in yuan, suggesting the end of the petrodollar hegemony. It is crucial to know that financial event to understand the complexity of that crisis in depth.
Bitcoin Emerges as an Option for Sanctioned Countries
A few weeks ago, some analysts would have thought it was too early to say Bitcoin (BTC) would be a strong option for sanctioned countries. The pioneering cryptocurrency is relatively young, and not everyone has yet accepted it globally since several countries banned it.
Nations like Venezuela, China, and Iran decided not to deposit all their government machinery in that cryptocurrency. They do not plan to use it for paying debts, products, and services, or as legal tender.
However, Russia recently said that Bitcoin is an option and is ready to be an alternative against the sanctions by the United States. Pavel Zavalny, the chairman of the Committee on Energy, clarified the Eurasian country would trade oil and gas in currencies other than the US dollar.
The decision emerged following a series of statements by Vladimir Putin, in which he stated the West did not meet its monetary obligations. He argued that the freezing of Russian reserves undermined confidence in the US dollar and the euro.
The invasion of Ukraine by Russia triggered the sanctions that fell on the latter. It worries how easy it has been for the United States to decide the fate of the money of a nation.
The North American country did not conduct the blocking towards Russia alone, but the power of the US dollar is irrefutable. The leaders of a country with fewer than 400 million inhabitants have almost half of the world’s money.
In that context, the priority for the world is to find an alternative to the US dollar and other centralized currencies. Fortunately, nobody has to invent it or fight and reach agreements with the leading powers, as it already exists. Bitcoin emerged as a response to the crisis of confidence in the world economy, standing as an asset not depending on a central bank.
By Alexander Salazar
