(Full disclosure: I’m building Coinbits. app, a Bitcoin banking platform. )
Ahead of the 2024 U. S. presidential election, front-runner Donald Trump has made it clearer so far that he intends to make Bitcoin a key issue in his crusade, a theme that other presidential candidates have also highlighted.
Yesterday, in a raucous social media post, Trump said:
Trump’s speech on bitcoin, not cryptocurrencies in general, demonstrates an understanding of bitcoin’s unique potential to promote independence of power and economic revitalization. Under the Biden administration, regulatory agencies such as the SEC and FDIC aggressively stifled the expansion of the Bitcoin sector, causing an exodus of trading capacity to more favorable foreign jurisdictions. If those policies were reversed, a supercharged domestic Bitcoin mining industry could simply catalyze a resurgence of U. S. trade capacity, task creation, and progression of power resources.
Trump’s presentation of U. S. -mined bitcoin as “MADE IN USA” is a clever way to articulate the overlap between the interests of the bitcoin industry and its “Make America Great Again” movement. It aligns Bitcoin mining with themes of American reindustrialization, task creation, and prosperity. It remains to be noted that this will resonate at its base.
By backing Bitcoin, Trump faces the risk of central bank virtual currencies, which would allow for more government oversight over daily transactions. Unlike Bitcoin, which is decentralized and operates beyond the control of a single authority, CBDCs provide governments with unprecedented control. , allowing them to monitor and censor any and all monetary transactions, no matter how small. A physically powerful Bitcoin infrastructure in the United States would serve as a bulwark against the adoption of a CBDC here.
The stakes cannot be overstated. Not only is it very important to avoid a gloomy long term for CBDCs, but also to make sure that the United States does not defeat other countries that realize that Bitcoin can be used to identify strategic advantage.
Historically, the wealth and strength of nations have been related to their gold reserves. In the late 19th and early 20th centuries, the British Empire established the gold standard, and its global flows of gold cemented its prestige as a leading force in the world.
However, two global wars ended this advantage. After World War I, Britain began to see a gold flight, a flow that accelerated after World War II as the costs of war and reconstruction depleted its reserves. This increase in gold reserves led to the Bretton Woods Agreement in 1944. The new system, the U. S. dollar, which was then subsidized through gold that had recently been transferred from Europe to the United States, has become the world’s main reserve currency. This move ended European economic dominance and ushered in an era of American hegemony.
In a virtual economy based on artificial intelligence and other emerging technologies, Bitcoin will take on the role of gold and the dollar in converting global force dynamics. Countries with giant Bitcoin reserves and Bitcoin commercial production capacity will have more influence than those without. This dynamic is paving the way for a zero-sum game in which nations use Bitcoin to compete and gain strategic benefits over others.
For Trump, Bitcoin mining aid may just be a game for the presidency, or it may simply have more substance than that. Regardless, how the United States responds to the opportunities presented through Bitcoin will have a profound effect on its ability to retain its position in the coming era of global power. The decisions made today will have an effect beyond the next election cycle and shape the long term for decades to come.
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