Washington Needs to Wake Up to Crypto Before its Too Late

The United States can comfortably hold on to its position as a world power as of now, but its rivals, along with others which it has slammed with economic sanctions, are taking advantage of cryptocurrencies and blockchain technology to undermine its authority

Last week, the Foundation for the Defense of Democracies (FDD) published a report in which details how countries like Iran and China have been using the blockchain to grow their economies and circumvent U.S. sanctions.

In the study, the FFD showed that these countries have been trying to evade sanctions for a long time, but crypto assets have now provided them with an opportunity to conduct commerce without having to necessarily rely on the global financial system, which still relies on the dominance of the United States- their common “foe.”

The report detailed, “Russia, Iran, and Venezuela have initiated blockchain technology experiments that their leaders paint as tools to offset U.S. financial coercive power and increase sanctions resistance. China is also wary of U.S. financial power and the ever-present threat of sanctions against Chinese officials.”

#Enterate || El Petro podrá ser adquirido por personas jurídicas y naturales desde su portal web https://t.co/0ldQe5CTHL #PetroNuevaEraEconómica pic.twitter.com/x2gyoncOVd

— Vicepresidencia de Economía (@ViceEconomia) October 29, 2018

Another country that was mentioned in the report was Venezuela, which launched its Petro cryptocurrency last year as a means of evading sanctions and still selling its petroleum export. However, things have been quite rough for Venezuela and Petro; the currency hasn’t gone mainstream as the government would like, and Venezuela’s President Nicolas Maduro had to resort to compelling local banks to adopt the asset.

However, as the report outlines, the “failure” of Venezuela and Petro has more or less served as a “guide on what not to do” for these other countries as they embark on their respective cryptocurrency journeys.

For Russia, the solution seems to be in blockchain technology. The FDD report outlines that the Russian government has been working on blockchain pilots with the intent to develop commerce routes that are out of Washington’s control, and successful implementation would mean that they won’t have to rely on the United States to revive their economy.

Iran has been hit by more sanctions lately, and given that it has been blacklisted from the Belgium-based SWIFT global banking network, it has found itself teetering on the brink of economic collapse. As an Al Jazeera report detailed, the government could possibly be looking to develop a crypto asset to help alleviate this.

The country definitely has a proper structure to get this done. Cryptocurrency mining is recognized as an industry, and given the fact that PayMon, a gold-backed cryptocurrency developed in the country, has already been adopted by four banks, there is a lot of promise for sure.

As for China, things are a tad murky. The country has banned cryptocurrency exchanges and Initial Coin offerings (ICOs) for the better part of two years, but the FFD report claimed that it is still in the best position to develop a blockchain-based digital infrastructure that could knock the dollar off the pinnacle.

So, while you might not be able to engage in Bitcoin trading while in China, the government seems to be inclined to harnessing blockchain technology. That’s got to count for something. As it states, banks and financial institutions all over China have been looking into blockchain’s applications for economic facets such as “credit, finance, and real estate projects, as well as a blockchain-powered securities trading platform.”

The entirety of the report reveals how a coalition of the “foes of the West” could use cryptocurrencies, the same tool that the United States has continued to dally on as regards regulations, to bring a cascade of disruptions to the global financial system. If Washington wants to keep the status quo, there’s a need to wake up to the potential that blockchain technology and cryptocurrencies can bring.