The Capitol riots. Afghanistan. The perennially predictable debt crisis standoff (when Republicans are in the minority). The fallout with France over the Australian submarine-focused security deal.
After promising to restore the nation's standing in the post-Trump world, Biden's America has done little to encourage the world to willingly submit to its hegemony. But despite glaring incompetence and reliability issues, the world at large is left with a choice in the 21st century, a binary choice reminiscent of the one laid at the feet of the world after the Second World War. That choice is simple: East or West.
Last century, nations around the world—with a few self-determining exceptions (Gaullist France did its best to determine its own destiny despite its membership in NATO, a self-determining Macron's France desires but won't achieve)—were forced to choose to align with Moscow or Washington. This century, however, the world's nations must choose between China or America, between an increasingly incompetent and inward-looking superpower and an increasingly competent albeit authoritative and expansionist dictatorship.
While the choices seem more dubious, they are equally stark. As in the previous century, democracy is at stake and must prevail. To this end, the adoption and encouragement of Bitcoin may be one of the best tools we have to thwart the rise of an internationally adopted Chinese digital yuan, and all the power such a development would give to Beijing. And that is just one reason I am buying Bitcoin.
Beijing is attacking Bitcoin relentlessly because it views it as a competitor to the adoption of its digital currency, the digital yuan. China is not the only nation developing its own digital currency; 81 nations including the United States are engaged in their own digital currency projects, albeit to varying degrees of commitment. The U.S. doesn't really want a digital currency and would prefer that the dollar remain the world's reserve currency. But Biden, for good reason, recognizes that the United States' power and influence will inevitably shrink as Beijing's rises. We cannot win this (hopefully) cold war by fighting fire with fire. We must make strides to divorce money from the state. Let people own their money the way that they own gold.
The Soviet Union, despite some momentary glory and economic successes, was bound to fail. The economic system of Soviet communism was untenable, and it was only a matter of time until they went broke. But China isn't even a communist country in truth, let alone the Soviet Union. It is a state-sponsored capitalist authoritarian regime dedicated to amassing wealth and spreading its influence. It is, by comparison, a fiercely competent regime. It will not go broke fighting the West, and any hope that the Chinese themselves will rise and demand democracy becomes less likely so long as the Chinese continue to live comparatively well.
Bitcoin: Paradise Lost or Remade?
Ideologically, the best fight against authoritarianism would
be to embrace Bitcoin and crypto more generally wholesale, a kind of radical
anti-Statism. Such a laissez-faire approach is, unsurprisingly, championed by
Elon Musk, the libertarian icon. The Tesla (Nasdaq: TSLA) CEO Musk said on Tuesday that governments should stay
out of regulating the cryptocurrency market.
Instead, he believes that regulators should simply "do nothing" and "just let it fly."
But that is unlikely. And it will take more than El Salvador's adoption of Bitcoin as a legal tender to sway the world towards its adoption.
It seems clear then that some regulation of the $2 trillion crypto market may be essential to encouraging its long-term growth to the chagrin of the Chinese. Rather than resist regulation, former U.S. Treasury Secretary Lawrence Summers says that the crypto industry should embrace it for its own sake.
Of course, regulators are usually for, you know, regulation, so take his advice with a grain of salt. But given the massive and growing size of international investment in this market, the dream of a totally deregulated world of crypto exchange is about as unlikely in the short- and mid-term as a democratic Afghanistan. Summers says that investors must shed the idea of Bitcoin and crypto as a "libertarian paradise."
Such a development may indeed be inevitable. And for the sake of buffering against a rising Beijing and its dreams of a world-dominant digital yuan, let us not make the perfect the enemy of the good. A regulated crypto market is better than none—just like an imperfect and oft-incompetent and paralyzed democracy is better than, well, Beijing. And what about crypto mining itself? If the United States encouraged crypto mining (like Texas lured the emigrant Chinese crypto miners to its shores) might it produce the dual benefit of both bolstering the economy as well as encourage the adoption of the "coin" everywhere outside of China's influence? Couldn't such a crypto mining boom tie the crypto market, albeit loosely, to the American economy?
In the end, Bitcoin and Beijing are here to stay, whether the latter likes it or not. And, while it'll be a bumpy ride short-term, I am confident that the more China fights it, the more—if America embraces it (regulated if necessary)—the more long-term growth in the crypto markets we'll see.