pahueg on Nostr: 𝐅𝐮𝐭𝐮𝐫𝐞 𝐠𝐞𝐨𝐩𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 ...

𝐅𝐮𝐭𝐮𝐫𝐞 𝐠𝐞𝐨𝐩𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐨𝐫𝐝𝐞𝐫 𝐚𝐧𝐝 𝐁𝐢𝐭𝐜𝐨𝐢𝐧

I just finished reading Matthew Pines‘ brilliant paper, “𝐺𝑟𝑒𝑎𝑡 𝑃𝑜𝑤𝑒𝑟 𝑁𝑒𝑡𝑤𝑜𝑟𝑘 𝐶𝑜𝑚𝑝𝑒𝑡𝑖𝑡𝑖𝑜𝑛 & 𝐵𝑖𝑡𝑐𝑜𝑖𝑛,” from the Bitcoin Policy Institute, and oooh boy, it’s amazing.

A few key points really clicked for me; I increasingly believe that the future macro-order will look as follows:

𝐎𝐧 𝐨𝐧𝐞 𝐬𝐢𝐝𝐞, 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐭𝐡𝐞 𝐄𝐚𝐬𝐭 (𝐂𝐡𝐢𝐧𝐚/𝐑𝐮𝐬𝐬𝐢𝐚) 𝐝𝐨𝐦𝐢𝐧𝐚𝐭𝐢𝐧𝐠 𝐠𝐨𝐥𝐝, 𝐞𝐧𝐞𝐫𝐠𝐲, 𝐜𝐨𝐦𝐦𝐨𝐝𝐢𝐭𝐢𝐞𝐬, 𝐚𝐧𝐝 𝐂𝐁𝐃𝐂 𝐧𝐞𝐭𝐰𝐨𝐫𝐤𝐬. 𝐎𝐧 𝐭𝐡𝐞 𝐨𝐭𝐡𝐞𝐫, 𝐭𝐡𝐞 𝐖𝐞𝐬𝐭 (𝐔𝐒 𝐚𝐧𝐝 𝐚𝐥𝐥𝐢𝐞𝐬) 𝐟𝐨𝐫𝐭𝐢𝐟𝐢𝐞𝐝 𝐛𝐲 𝐞𝐧𝐞𝐫𝐠𝐲, 𝐁𝐢𝐭𝐜𝐨𝐢𝐧, 𝐚𝐧𝐝 𝐬𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧𝐬.

At the start of this geopolitical contest, the U.S. was the undisputed winner. Thanks to having the global reserve currency (USD) and the world’s safest reserve asset (U.S. Treasuries), capital flowed into US markets, forcing countries like China to rely on the dollar for trade while financing America’s debt, benefiting their geopolitical opponent even more.

However, China has found a way out. Instead of recycling dollar reserves into treasuries, they’ve been buying hard assets, real estate and Western equities. Through the Belt and Road Initiative, China is also lending dollars to emerging markets in exchange for collateral like infrastructure (ports, land, dams).

But China is going further. By building a cross-bridge CBDC network with its partners, China can deepen financial ties and bypass the U.S. dollar system ever more.

All of this increasingly looks like a “heads China wins, tails US loses” situation.

So, how can the US and its allies counteract this?

Judging by what’s happening on Wall Street and the conversations happening in Washington DC, the US is discovering the power of Bitcoin and dollar-based stablecoins as a tool to counter these adversary efforts to challenge US geoeconomic power while reinforcing liberal value systems around the world.

For one, it can be argued that soon-to-be regulated private stablecoins are winning the fight against China’s Belt and Road initiative and cross-bridged CBDC arrangements on the US’s behalf. After all, market-driven transaction volume in the biggest US dollar denominated stablecoins vastly outpacing the CBDC efforts of the People’s Bank of China to-date.

Global demand for stablecoins, which are backed by US bonds, could become a crucial tool for U.S. debt financing. In a way, US denominated stablecoins act as indirect tax levied on dollar bitcoin flows. How so?

They can be viewed as a tax because foreign users indirectly "pay" by contributing to the demand for US assets, which allows the U.S. to finance its government debt more easily and cheaply. Essentially, international users of stablecoins are helping fund the U.S. government, much like how a tax supports government revenue.

It’s quite ironic when you think about it: the rise of Bitcoin, alongside today’s decentralized global altcoin casino, has unintentionally gifted the U.S. government a new strategic macro buyer for its debt—one poised to become even more influential in the near future. Put simply: if it weren’t for global shitcoin trading, stablecoins wouldn’t have grown as rapidly as they have.

In short, Bitcoin and stablecoins are emerging as some of the most potent geopolitical tools the US and its allies have against Eastern powers. It’s high time key decision-makers recognize that allowing Bitcoin to flourish—potentially even surpassing gold in monetary significance—would disproportionately benefit the US. After all, American citizens and companies hold a substantial portion of the global Bitcoin supply, and its adoption would fuel growth in US capital markets.

Bitcoin and the US dollar naturally complement each other, with US. dollar stablecoins serving as the crucial link between them! Stablecoin issuance will by driven by demand for Bitcoin and its rising dollar price.

lukegromen (npub1tcc…e6fh) put it well, when it wrote: “As the US finances more deficits w/ T-Bills, inflation rises secularly = BTC up = more stablecoins = more T-Bills = inflation up more = BTC up = more stablecoins = more T-Bills... wash, rinse, repeat.

This should also prompt the US to adopt a light tax policy on Bitcoin, recognizing that Bitcoin demand fuels stablecoin growth—and these stablecoins already act like an international "tax" on a growing global base of users that support US government debt.

#Bitcoin #Stablecoins #Geopolitics #USDollar #CBDC #Macroeconomics