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- Bitcoin has already been adopted by many countries as a form of payment amid heightened mainstream adoption.
- Russia has been accused by the West of using Bitcoin to evade international sanctions.
The evolution of money has seen huge shifts since the introduction of Bitcoin by Satoshi Nakamoto after the 2008 financial crisis. The perception that governments can print money out of thin air without dire consequences has significantly reduced in the recent past.
Moreover, two countries – El Salvador and the Central African Republic – have been using Bitcoin as a legal tender for more than a year. Additionally, more people around the world have adopted Bitcoin among other cryptocurrencies as a means of cross-border payments away from siloed banking systems.
As a result, the future of Bitcoin and blockchain technology has been touted as much brighter than that of the fiat currency market. Moreover, people trust the blockchain more than the central banks in the fight against inflation and transparency.
Russia Leads in De-dollarization
As global geopolitical differences get more complicated amid increased sanctions, different countries continue to move away from dependence on the United States dollar as a reserve currency. Already, the BRICS movement led by Russia and China has amassed more than 40 countries. In recent developments, Russia has teamed up with Ismailic countries in a bid to discuss their way forward on de-dollarization.
Russia’s Deputy Prime Minister Alexey Overchuk said;
Of course, our relations [with Islamic countries]are influenced by global shifts that are taking place and global trends. We are talking about processes of de-dollarization and the creation of an independent financial system. This broader agenda and how it affects countries and relationships allows us to see that relations between Russia and the Islamic states have a very large and very positive future,
Notably, Russia has significantly infiltrated the United States’ backyard, South America, in the course of de-dollarization. Moreover, one of the leading South American economies Brazil has teamed up with Russia and China in the BRICS movement.
According to Venezuelan President Nicolas Maduro, a decline in the use of the United States dollar as a global reserve currency is inevitable. Currently, the United States dollar controls approximately 58 percent of global reserve currency, down from over 80 percent a few years ago.
The Venezuelan President noted that the United States Fed has been adding weight to other countries by printing money out of thin air to repay the national debt. Currently, the United States Congress is in discussions of raising the national debt or even removing the cap entirely. Moreover, Congress will be forced to raise the debt again a few years down the line.
“They are adding to the process of the inevitable de-dollarization of the world…… Many alternative initiatives to the US dollar are emerging. We could say we are beginning to live a sustained accelerated process of de-dollarization of the commercial world, of world trade,” Maduro said.
Bitcoin Place in Global Trade
As many countries look into alternative currencies, Bitcoin is likely to emerge as the best due to its attributes. Zimbabwe has unveiled a digital coin backed by gold, its legitimacy may be questioned if users intend to redeem the coin for gold en masse. Consequently, Bitcoin, which is regarded as digital gold, is bound to be adopted for cross-border payments en masse.
