Ever since its release in 2009, Bitcoin has taken the world by storm. Not only does it offer an alternative to fiat currency but it also makes the financial system much more secure and transparent. Many people liken the advent of Bitcoin and blockchain to the invention of the Internet. It is because the Bitcoin has the potential to surpass the borders of financial networks and shape geopolitics worldwide. Thus, Bitcoin can reshape many of the geopolitical issues that we face today. Let’s asses how countries have taken up Bitcoin adoption to deduce the impact of Bitcoin on global geopolitics.
Bitcoin Adoption Around The World
While the advent of cryptocurrencies may not overhaul the fiscal network, it may prove an invaluable asset for governments to destabilize the dollar-based financial system. Over the years, Bitcoin has undergone a strenuous process to receive acceptance around the world. Let’s see how some of the biggest world powers treat this asset.
The United States
The US government has placed strict regulations on Bitcoin since 2013. One can trade Bitcoin as a decentralized virtual currency as it is fully legal and also subject to taxation as virtual property.
China has seen a long battle folding out for the legalization of Bitcoin and other cryptocurrencies. Like most other financial transactions, the Chinese government maintains a firm grip on all crypto transactions. However, the country’s president announced in October 2019 that China should invest in blockchain technology and reap its benefits. Although there are doubts over Bitcoin’s legalization in China, Bitcoin regulation news is abuzz with predictions of increased Bitcoin adoption in the country.
Japan seems the most prepared to introduce Bitcoin into its economic system. It has authorized a standardized framework to oversee the functioning of crypto exchanges. Users can deal with cryptocurrencies and also use Bitcoin to make payments. The Payment Services Act (PSA) framework has legalized cryptocurrency usage in the country.
The impact of Bitcoin is such that it has reached far and wide. The Russian government doesn’t support, regulate, or control the trade and exchange of cryptocurrencies. However, crypto exchanges operate freely in the country, and the citizens can buy and sell them. However, the Russian government bears no responsibility for their trade.
The Reserve Bank of India has prohibited the purchase, sale, and trade of cryptocurrencies. However, many Indian citizens have entered the crypto market and are also dealing with Bitcoin and other cryptocurrencies.
How Cryptocurrencies Are Influencing Geopolitics
The USD has faced little to no competition from other currencies. It has been at the forefront of the financial system since the end of World War II. However, the surge of cryptocurrencies can bring about significant changes to the geopolitics and global monetary policy soon. A thorough Bitcoin analysis would make it clear that countries can enjoy a higher degree of financial autonomy if Bitcoin emerges as an alternative currency. For example, countries like Russia, Iran, North Korea, Venezuela would find a way to deal with US-led international sanctions if they adopt Bitcoin. Also, Bitcoin can help create alternative platforms for transactions.
Changes in the global financial system can happen when emerging technologies know how to leverage their strengths and their rivals’ weaknesses. If countries can somehow utilize the strength of blockchain and cryptocurrencies, they can create a new financial order that can stand up to USD. However, to fully leverage the impact of Bitcoin, countries need to demonstrate a greater adoption toward it. Only then it can really change the geopolitics.