The BRICS could undertake monetary policies opposite to those of the USA, especially regarding Bitcoin and the dollar.
By now, the opposition between the United States of America and China resembles that of two true superpowers that openly trust each other on everything.
The BRICS are formed by Brazil, Russia, India, and South Africa, as well as China, but for now, they are literally dominated by the Chinese superpower.
BRICS fights the US dollar and Bitcoin
The United States of America obviously defends primarily their currency, the dollar USD.
But after Saturday’s statements by Donald Trump, one can imagine that they might also embrace Bitcoin, in case the former president wins the elections in November.
By now it is clear that Bitcoin is not a competitor to fiat currencies like the dollar, and that it can actually become a complementary currency especially suitable for savings, as has been happening for some years now in El Salvador.
So it makes perfect sense both for the USA to embrace Bitcoin while continuing to favor their dollar, and for the US government to adopt monetary policies that also involve the use of BTC.
Trump, for example, has suggested keeping the BTC already held by U.S. government authorities as a strategic reserve, without selling them, as has always been done until now. These are Bitcoin simply seized from criminals in the context of legal proceedings against them.
This speech could change if Trump does not win, also because the former president wants to make the USA the crypto center of the world, while his challenger Kamala Harris does not seem inclined to do the same (at least for now).
China and Bitcoin
China, on the other hand, has been opposing Bitcoin for years.
It issued a whole series of bans, culminating in the crash of April and May 2021 when it suddenly banned crypto mining across its entire territory.
Such bans, however, have never been very successful, so much so that to date, despite the ban on mining still being in place, it turns out that China is the second country in the world with the most hashrate, behind only the USA itself.
The key point is financial freedom, which Bitcoin guarantees but the Chinese government simply does not like. Or, to put it better, China does not like its citizens to have too much freedom, not even in the financial sphere.
From this point of view, there is a real opposition between China and the USA, especially if Donald Trump’s policies prevail. The USA is moving towards global crypto dominance, also because they already dominate the crypto markets, while China has literally opted out.
Fiat currencies
This opposition also exists on the level of traditional fiat currencies.
China already a few years ago launched its native digital currency of the central bank (CDBC), which however did not achieve success.
The reason for this partial failure could be due to the fact that Chinese citizens do not trust using a currency where all transactions are recorded transparently and non-anonymously on a central bank ledger. It is an additional reduction of financial freedom, which even the Chinese do not appreciate.
The USA, on the other hand, not only have not yet adopted a CBDC, but Trump himself has declared that if he wins the elections, he will prevent the Fed from issuing a CBDC during his term.
Therefore, China and the USA are opposed not only in the crypto field but also in the sector of traditional fiat currencies.
The US dollar: the clash with BRICS and Bitcoin
A slightly more particular issue, however, is the one concerning the US dollar.
The point is that it is not only the most widely used fiat currency in the world, but also and above all that it is the only fiat currency used globally nowadays even in other countries outside the USA.
China in recent years has tried to impose its yuan as an alternative, but without achieving any results. The reason seems to be also and always related to the issue of financial freedom, which China does not want to guarantee to those who use its currency.
Now they are studying an alternative, namely a new BRICS currency.
Within the BRICS there are large democracies, such as India and Brazil, but there is also another dictatorship, namely Russia.
Furthermore, it is China that dominates unchallenged with all its enormous power within this aggregation, even though India has been growing a lot lately.
The idea is to create a new, unique currency for the BRICS, somewhat like when some countries of the European Union created the Euro.
It is obviously a CBDC, that is, a normal centralized fiat currency that has nothing to do with the true decentralized blockchain, even if for purely propagandistic purposes the term “blockchain” is used (inappropriately) to indicate the centralized ledger on which it will be based.
The objective is to compete with the dollar on a global level, and given that China and India alone together have more than a third of the entire world population, and seven times the population of the USA, it is absolutely possible that their CBDC could spread, especially in cross-border transactions within the BRICS.
Much more difficult, however, is to imagine that other countries that are not the USA or BRICS would decide to use a strictly controlled CBDC like the one that China will issue through the BRICS themselves.
Peter Schiff and China
The well-known Bitcoin detractor, and gold supporter, Peter Schiff, has lashed out against Trump’s idea of making the USA the crypto center of the world, instead going so far as to praise China.
#Trump claimed that America must dominate the #Bitcoin industry, as if we don't China will. China has no interest in Bitcoin. They already made mining it illegal. China is happy to let the U.S. .waste its resources on Bitcoin, while it focuses on manufacturing goods people need.
— Peter Schiff (@PeterSchiff) July 27, 2024
Schiff wrote that China has no interest in Bitcoin, and that it has already made mining illegal.
He also added that China is happy to let the USA waste their resources on Bitcoin, while it focuses on producing goods that people need.
In reality, even the USA produces goods that people need, and if the two productions are compared in proportion to the number of inhabitants, it is discovered that the GDP per capita of the USA is three and a half times higher than that of China.
Furthermore, China has decided not to invest public resources in Bitcoin, but many Chinese have freely decided to invest their private resources in Bitcoin mining at the cost of breaking the law, just to extract BTC. Instead, the Chinese state has decided to invest its own resources in the development of a CBDC created to reduce the financial freedoms of its citizens.
The opposition between China and the USA, that is, between the BRICS bloc and the bloc of pro-US countries, seems to be almost total, especially in the financial sector. In particular, in the financial sector, it seems to be an opposition between two different political approaches, one aimed at reducing citizens’ freedoms as much as possible, and another that at least aims to guarantee a consolidated and as broad as possible base of freedoms.
