Will Cryptocurrencies Undermine the Hegemony of the US Dollar and the International Banking System?

September 27th 2020 | كتبها

Cryptocurrencies, like Bitcoins and kindred mint, are essentially computer programs that create “exchange value” in virtual space. Although the US dollar value of one bitcoin, as the predominant form of cryptocurrency, has been fluctuating wildly over the last few years (or even months and weeks), a bitcoin stands today at somewhere between $10,000 – $11,000.A report by Fortune Business Insights says that “the global cryptocurrency market size stood at USD 754.0 million in 2019 and is projected to reach USD 1,758.0 million by 2027”. So this is definitely a growing market.

More importantly, virtual currency does not abide by a central bank or government potentially spelling an end to monetary policy, or the ability of a central bank to control money supply, and therefore the interest rate and the exchange rate.

Cryptocurrency is simply a bunch of computer programs maintained by network users/ miners, who can be anyone with the appropriate computing resources, and who receive cryptocurrencies as a reward. No banking system or financial establishment is needed as an intermediary. And speaking of financial inclusion, cryptocurrencies allow access to anyone with an internet link. Cryptocurrencies can be transferred across borders anonymously, and transactions in cryptocurrencies can be conducted securely and safely on a one-to-one basis without any oversight, or even taxation.

Perhaps virtual currency creation is a sheer reflection of the ongoing transformation into a virtual economy. Perhaps it’s a prelude to Artificial Intelligence (AI) controlling the global economy and the international financial system (if you like conspiracy theories). Perhaps it represents the quintessential core of globalism recreated without central banks and governments. But how can there be globalization without international banks?! Will the miners of cryptocurrencies become the new lords of the virtual globalized economy?

Big questions loom in the horizon. Yet while our noses get stuck in the COVID 19 thing, a crypto new world is being formed right under our masked noses.

Ibrahim Alloush

الموضوعات المرتبطة

Two Equations which May Help Explain Why Prices Rise and the US Dollar Appreciates in War-torn Countries under Siege.. Syria as a Case in Point

For people living in countries torn by war, then besieged by stifling sanctions, the issue of rising prices and depreciating local currencies is a very emotional subject which impinges on the very core of their livelihood and the livelihood of their families. Yet it is precisely such dire situations which require an objective understanding of [...]

Real versus Financial Capital: the Fundamental Disequilibrium Destabilizing the Macroeconomy Today

    Technically speaking, the capital value of a publicly-traded firm is equal to the value of its shares, i.e., the value of its market stock. For example, if company X has 1000 stocks (shares outstanding) in circulation, and each is worth $100, then the capital value of that little firm is worth $100,000 if someone wants to buy [...]

Imperialism without Colonies: Even More Relevant after All these Years

  "Imperialism without Colonies" is actually the title of a book by Harry Magdoff whose chapters were written in the sixties and the seventies of the twentieth century. However, the concept conveyed in that book of an imperialism that prefers not to undertake extended occupations has become ever more relevant with the passage of time. It [...]

A Neoclassical Approach to Surplus Value Theory

    Using standard neoclassical textbook microeconomics, one can show that surplus value emerges from consuming labor power by firms even under the strict conditions of perfect competition and diminishing returns to labor. Starting from the first-order conditions for maximizing a profit function, equilibrium in the labor market [...]

Nanotechnology: For Whom, against Whom?

  “Amid the COVID-19 crisis, the global market for Nanotechnology estimated at US $54.2 Billion in the year 2020, is projected to reach a revised size of US$126.8 Billion by 2027” (Globe Newswire, July 15, 2020). Over the last couple of decades, nanotechnology products and devices have become ballooning multi-billion dollar markets. [...]
2020 الصوت العربي الحر.