China & America’s Economic War with Matthew Pines

 
 

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“It’s not being looked at properly as a realistic scenario that, say, by 2030 you could have several countries that have meaningful holdings of bitcoin as part of this geo-economic arrangement, and this is a way for them to hedge.”
— Matthew Pines

SHOW DESCRIPTION

Matthew Pines is a Managing Consultant at the Krebs Stamos Group and a Fellow at the Bitcoin Policy Institute specializing in national security. In this interview, we discuss the rapidly changing geopolitical order as China competes with the US for dominance, and how Bitcoin may become one of a number of alternative global reserve assets to US debt.

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There are moments when the world pivots when events change the course of world affairs. The Russian invasion of Ukraine was one such event. More to the point, it was the western sanctions imposed on Russia that will come to be seen as a paradigm shift. It was when the world went from working in an open Eurodollar system to a closed system involving alternative forms of money.

In the face of increasingly fraught geopolitics and a loss of faith in the US dollar, certain countries are seeking to diversify the reserve assets they hold. This will create problems for the USD-UST system, at the same time the US is facing significant headwinds: dealing with huge structural debt, ‘reshoring, restocking and rewiring’, and countering China’s rise.

What was once a theory is now turning into reality: China is on the cusp of being able to compete with the US, principally within the Asian geopolitical sphere. To this end, China has a strategic imperative to secure reliable commodity and energy sources, and will likely move towards a proto-petroyuan system, and coerce other countries and entities to follow.

In this context, Bitcoin is emerging as a viable alternative to fiat currencies and gold as a global reserve asset. It is a unique form of money: a digital commodity with global fungibility, limited counterparty risk, and large liquidity. But critically it is a politically neutral asset, an increasingly attractive attribute for countries seeking to hedge their exposure to increasing geopolitical risk.

In the US, the rise of Bitcoin companies, along with the Biden administration's Executive Order on Digital Assets and positive statements by officials, suggests the US could accept Bitcoin's gradual adoption and monetization. From a national security perspective, key decision-makers may realize that allowing Bitcoin to serve as a new global reserve would disproportionately benefit the US.

TIMESTAMPS

00:01:11: Introductions
00:04:10: Bitcoin as a tool to navigate geopolitical turbulence
00:08:22: Understanding the changing global power strategy
00:17:27: Signs of the global structure breaking
00:20:01: China's high-wire act, and rising tensions around the South China Sea
00:30:37: The Future Geopolitical Order and Bitcoin
00:44:11: Russian sanctions fracturing global economic power centres
00:57:44: The Russia/Ukraine conflict
01:08:36: Money and hegemonic power, and the petrodollar
01:17:56: Russia sanctions a major pivot
01:25:23: Global reserve assets, and China's Belt and Road Initiative
01:37:03: China vs US military capabilities
01:41:26: China's plan to shift balance of power
01:52:02: Bitcoin's role in the new world order
02:08:44: Final comments

 

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SHOW NOTES

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