After the United States and Brazil, it is Russia's turn to consider integrating bitcoin into its foreign exchange reserves!
Bitcoin, Да!
Duma deputy from the “New People” party Anton Tkachev officially asked the Minister of Finance of the Russian Federation Anton Siluanov to create a strategic bitcoin reserve.
“I ask you, dear Anton Germanovich, to evaluate the feasibility of creating a strategic reserve of bitcoins which will be added to the exchange reserves in traditional currencies. If this initiative receives a favorable opinion, I ask you to submit it to the Government of the Russian Federation”we can read in the letter.
The young MP specifies that traditional foreign exchange reserves – notably the yuan, the dollar and the euro – are threatened by sanctions and inflation. For Anton Tkachevthe time has come to introduce new payment systems, but also inviolable reserves in the face of geopolitical turmoil.
“Cryptocurrencies are becoming virtually the only way to trade internationally for sanctioned countries with limited access to traditional international payment systems. […] Furthermore, in recent years, bitcoin has the highest return among all investment assets »he wrote.
Vladimir and bitcoin
Unless Europe and the United States reverse the freeze on Russian foreign exchange reserves (300 billion euros), alternative monetary systems like bitcoin will become more widespread. This is essentially what the Russian president declared at the Moscow Valdai Club Forum last month:
“We are not abandoning the dollar. It is the United States that refuses to allow us to use it. This is stupid of them since he is the pillar of American power. Its use as a means of payment is not declining that much, but its role as a reserve currency is gradually diminishing. […] We are thinking about the payment tools of the future. »
Faced with this distrust, President Trump raised his voice by threatening the BRICS with punitive customs taxes if they abandoned the American currency:
“The idea of BRICS countries cutting themselves off from the dollar while we stand by is over. We demand that these countries commit not to create a new currency, nor support another currency to replace the dollar, otherwise they will be subject to 100% tariffs. »
The Russian president responded last week at the Moscow Economic Forum by uttering the word Bitcoin for the first time. So this is the payment tool of the future that we were talking about.
“Who can ban bitcoin? Person. […] It's a new technology. Whatever happens to the dollar, these tools will grow whether we like them or not, because everyone wants to reduce costs and improve reliability.”he said.
Mr. Putin also took the opportunity to recall how the United States benefits unduly from printing international currency.
Exorbitant privilege
The Russian president criticized the undue advantages that the United States derives from printing the international reserve currency, with figures to back it up:
“Using the dollar as an international currency brings a lot of money to the United States. Undeserved money. According to our experts, we're talking about $10 trillion gleaned in the last ten years alone, simply because the dollar is used as the world's reserve currency. Ten thousand billion is a lot, it means that they consume more than they produce. And that's very important. »
This money is obtained in multiple ways. For example by collecting interest on loans from international institutions such as the IMF or the World Bank which are mainly made in dollars.
Furthermore, according to the Bank for International Settlements, foreign loans in dollars reach 12,800 billion. That’s as many dollars on which American banks collect interest.
Furthermore, 58% global foreign exchange reserves are placed in Treasury bonds (i.e. 23% of US public debt). In total, the equivalent of 8,000 trillions of dollars of U.S. debt is held by foreign entities. This allows the United States to borrow cheaply.
Finally, these dollars coming home counterbalance their gargantuan trade deficit. The greenback remains strong despite a chronically negative trade balance. No other country can import more than it exports without seeing its currency collapse.
In short, the United States is parasitizing the world economy and this rich income largely explains current geopolitical tensions.
Bitcoin in reserve
Despite American anger which is expressed through a proxy war in Ukraine, the trend towards dedollarization is irremediable. The world is looking for a new international reserve currency to trade on equal terms
China has been relentlessly reducing its dollar reserves for more than a decade. Many countries are also diversifying their reserves, notably in gold and, sooner or later, the Gulf countries will swap the petrodollar for the petroyuan.
America has no choice but to reduce its lifestyle, which will translate into a reduction in imports. Either via a drop in the dollar exchange rate, or early via customs duties wanted by Donald Trump.
The next US president appears ready to make concessions rather than start a world war. This is what signals its intention to produce more on American soil and its green light for the creation of a strategic reserve of bitcoins.
Letting Washington acquire bitcoins before anyone else could facilitate the emergence of a fair international monetary system. Becoming the international reserve currency par excellence is the natural destiny of bitcoin. For two main reasons:
-It is infinitely rarer than gold. Bitcoin is a technological breakthrough creating an absolute store of value for the first time.
-He is also stateless and elusive. No one can “freeze” foreign exchange reserves held in bitcoins.
Bitcoin offers a way out to allow the United States to save face and avoid a third world war. He is a Bretton Woods 2.0.
That said, the Russians do not seem to have any intention of losing priority and it will be interesting to see if the Duma takes action before the US Congress.
Regardless, remember that Russian bitcoin miners already control 17% of the hashrate and the industry is growing even faster than in the United States.
Don’t miss our article: “Soon a Russian strategic bitcoin reserve? “.
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