Bitcoin banking symbol. Concept of bitcoin mass adoption of hedge funds, pension funds, VC capital, … [+]
Bitcoin
Bitcoin
In an era marked by global economic volatility and political uncertainty, the concept of a new world order is increasingly gaining traction. Now, questions loom on how this new world order will take shape.
The Changing World Order
In his book of the same title, The Changing World Order, Ray Dalio provides insights into the rise and fall of nations, strongly influenced by the level of adoption of their currencies as global reserve currency. The US dollar has long held this position, but its reign is being increasingly challenged by rising debt levels, growing income inequality, political polarization and most importantly by recent geopolitical developments. Since the US started to weaponize the US dollar, by seizing dollar reserves from Afghanistan’s central bank after the Taliban’s re-emergence to power, or by cutting off Russia from the SWIFT payment system following the invasion of Ukraine, sovereign countries have started to look for alternatives. As an example, the BRICS countries are currently “de-dollarizing”, by advocating for a new common currency for trade and investment between each other, and have already started to boost trade in national currencies instead of the US dollar.
If you read Dalio’s book, you note that the world has nearly always been led by a single nation and their respective reserve currency (Britain before the US, and others before Britain), however in considering the changing world order, one potential outcome could be a multi-polar world order with a decentralized reserve currency rather than a sovereign one, namely Bitcoin.
A Decentralized Reserve Currency
The days of Bitcoin being declared #dead are officially gone, and with former presidents advocating for national Bitcoin reserves, the digital asset is entering a new stage of adoption, a sovereign one.
At a recent Bitcoin conference in Nashville, former U.S. President Donald Trump promised to maintain a “strategic national bitcoin reserve” and advocated for Bitcoin to be mined in the US, interestingly also noting that “if we don’t do it, China will do it”. In addition, Senator Lummis proposed to introduce legislation calling for a “strategic bitcoin reserve” that will reduce national debt of the US by buying 1 million bitcoin over the course of five years.
The US is not the only country considering this move, with a number of others having already implemented these policies, notably the first – but not the only one and neither the last – El Salvador already adopted Bitcoin as currency and added it as part of their national reserves.
The Next And Last Global Currency
One of the primary advantages of Bitcoin as reserve currency is its scarcity. With a fixed supply cap of 21 million coins, the value of Bitcoin is not subject to inflationary pressures, which can erode the purchasing power of traditional currencies. This inherent value stability is appealing to nations seeking a reliable store of wealth and medium of exchange. Bitcoin’s decentralized nature also eliminates the need for intermediaries like central banks or governments, rendering it less susceptible to political manipulation.
Global blockchain background. (World Map Courtesy of NASA: … [+]
As more countries recognize the benefits of adopting Bitcoin as their sovereign reserve currency, a new world order begins to take shape representing a seismic shift from history. Through increased adoption of Bitcoin as reserve currency, we can only expect to see profound changes in the way nations interact economically and politically.
Whilst the US Dollar became the de facto reserve currency of the world following the Bretton Woods agreement in a unipolar world, Bitcoin can take its place in an increasingly complex, multi-polar world – but only time will tell…
