American Foundation for the Defense of Democracies put out a report on July 11 that discussed adversarial countries use of cryptocurrency. The West realizes that if new currencies are made, passed as law, or used in place of the oil dollar there could be real problems. The use of cryptocurrency is on the rise and America is aware. The FDD is concerned that each country may make its own cryptocurrency and make trade agreements in order to export and import oil. This, in turn, would make setting sanctions on such countries as Iran, China, Venezuela, and Russia very difficult. Globally, an adversarial country could compete economically with other third world nations if crypto was created for their citizens to buy and sell, rather than rely on foreign money, particularly for oil.
Iran still holds that cryptocurrency is illegal, whether using it for selling or purchasing. America is fearful that the use of bitcoin and crypto will lead to access to goods that will decrease the power of sanctions.
China is currently in the works of creating its own cryptocurrency to outdo Facebook’s Libra. China feels threatened by Libra and would rather its citizens use China made crypto than Libra. China has outlawed crypto and bitcoin. However, that does not mean that a suitable China-made replacement is out of the question.
Russia has a bill going through Parliament that will decide the fate of cryptocurrencies in that country. However, the bill should implement the creation of a cryptocurrency then Russia could ultimately trade with it and totally side-step the West and obtain foreign oil from other countries. Russia could also make a deal to utilize the currencies for exports and imports with China, Iran, and Venezuela.
Cryptocurrencies scare the American government because it can be held in reserves by the adversarial countries and this would throw the American government in with the nations that are sanctioned. Literally, these adversarial nations could become a world leader and that scenario is described in detail in the July 11th report. The worst-case scenario would be if they all started making cryptocurrencies and then established trade deals with each other, effectively leaving the United States out of the picture.
Cryptocurrency in the US
Online cryptocurrency trading is still illegal in most of the countries. However, that is not stopping the nations from considering jumping on the crypto bandwagon. This sudden jump from illegality to everyday use would be disastrous for the United States. Oil is sold by the dollar. If these nations all agreed to use cryptocurrencies rather than the dollar, America would be in real trouble, as it has no reserves of such currency. Right now, there is no threat that is current. That could change shortly.
Russia might be the first nation to openly embrace cryptocurrencies. America will have to get reserves of cryptocurrencies or else it will fall behind the nations that promote them. In other words, America needs to deeply look at the consequences it could be in for with these nations and their cryptocurrencies.