Taiwan and geopolitics of Bitcoin

The diplomatic crisis unleashed in Taiwan risks accelerating dedollarization and causing a shortage of semiconductors. This bodes well for bitcoin in the long run.

Nancy jumps on Taipei

The speaker of the US parliament is the highest American official to visit Ilha Formosa in 25 years. This fanfare visit provoked the ire of China, which sees it as a provocation.

“Our visit reaffirms that America stands with Taiwan, a robust, vibrant democracy and our important partner in the Indo-Pacific region. »

The parachuting of Nancy Pelosi comes after multiple warnings, in particular from the Chinese Minister of Foreign Affairs who warned that “Taiwan’s reunification with the mainland is a historical fatality.”

[Rappel historique : le gouvernement de la République de Chine s’est réfugié à Taïwan pendant la guerre civile perdue contre les communistes. Dans les faits, Taïwan n’a jamais proclamé son indépendance et chacun revendique la légitime souveraineté sur tout le territoire chinois (Chine continentale et Taïwan).]

The crux of this diplomatic scandal is the meeting between the Chinese president and his American counterpart barely a week earlier. Seeing a diplomatic delegation land in Taipei so soon after is a humiliation for Xi Jinping. And losing face is unforgivable in Chinese culture.

Military exercises and heavy missile fire towards the Taiwan Strait also suggest that the Rubicon has indeed been crossed. Retaliation will be inevitable, in true Sun Tzu style: calculated, strategic, tough, and long-term.

China has already banned silica sand exports to the island. A hard blow since this raw material is essential to the flagship of Taiwanese industry: that of semiconductors.

Its global market share is 66% according to Nikkei Asia! The technological advance of TSMC (Taiwan Semi-Conductors Manufacturing Company) is at the heart of the contention because semiconductors are indispensable in the fight for technological supremacy.

Many American chip developers rely on the advanced technologies of TSMC, which manufactures chips in three nanometers, and soon two nanometers. The latter are essential for smartphones, supercomputers, data centers, or even the American army’s F-35 fighter planes.

It is no coincidence that Nancy Pelosi has meet the leaders of this industry during this whirlwind passage. His goal was to convince TSMC to relocate to the United States. This maneuver comes a week after the vote of the American CHIPS act which offers a jackpot of 52 billion to Taiwanese companies that will take the plunge.

All this to say that it is very likely to expect massive inflation to hit electronics. This is the first reason why the Taiwanese crisis is doing bitcoin business.

Will China sell US debt?

The second reason is that the Middle Empire could get rid of its 980 billion US debt. Or about 3% of all US public debt:

CHinese holding of us treasuries

Beijing will surely seize this opportunity, especially since the Russian Foreign Minister has been touring the world for some time to encourage all nations to stop trading in dollars.

For Mr. Parsi, director of the Swedish Institute of International Affairs, China will be “the key player of dedollarization, while “Russia will weigh heavily in this process”.

The BRICS club is also discussing a new reserve currency modeled on the IMF’s SDR. That is to say a currency backed by a basket of currencies.

The question of creating an international reserve currency based on the basket of currencies of our countries is under consideration.President Putin said at the fourteenth BRICS summit last July.

Not to mention the fact that Saudi Arabia is considering joining the BRICS. This rapprochement may suggest that Riyadh intends to stop selling its oil exclusively in dollars…

Be that as it may, there is no longer any doubt that the international monetary system is about to change profoundly. And given the risk of military confrontation, the world would badly need a STATELESS, anti-inflationary and censorship-resistant: bitcoin.

The impossibility of prohibiting a bitcoin transaction has become essential in view of the recent freezing of Russia’s foreign exchange reserves (150 billion dollars and 150 billion euros).

The absolutely limited money supply of bitcoin is also appreciable. It is indeed not certain that a basket of currencies eaten away by inflation will be unanimously accepted to replace the greenback…

Even the ECB request if bitcoin would not be the ” Holy Grail “ international payments:

“The Bitcoin network (completed with additional layers such as the Lightning Network to ensure high throughput of fast transactions) could be the holy grail of international payments. The whole world can use Bitcoin ‘as is’, […] without any additional investment. This is because the currency conversion takes place outside the network. »

In other words, bitcoin is already ready to use. There is a turnkey international monetary system that will soon replace all foreign exchange reserves. Or the equivalent of 12,000 billions of dollars. On that day, a single bitcoin will be worth over $600,000.

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