With bitcoin growing popularity, decentralization, cryptocurrencies, blockchain, Chinas narrative to launch the digital Yuan and Facebook exploring to launch Libra —the U.S. is scared for losing the power they have with the dollar dominance.
A year ago, U.S. President Donald Trump bashed bitcoin on Twitter as money created from “thin air”. Also, Mnuchin, the U.S. Treasury Secretary called bitcoin a “national security threat.”
Actually, the U.S. has already admitted that bitcoin is threating the dollar world dominance as a reserve currency and are looking to hire researchers to find how bad it could be for the U.S. economy and security.
It is a popular opinion among crypto enthusiasts that either a mass adopted cryptocurrency or a central bank-issued digital currency could undermine the dollar dominance.
Earlier this month the .S. Office of the Director of National Intelligence published a job listing looking for two researchers to make an evaluation about the effect of the U.S. dollar losing its authority status in the world.
If one of the above scenarios happens the U.S will not only lose its status but also the authority they have in the world because of the almighty dollar dominance, having no ability to put sanctions and to weaponize the dollar anymore.
The job listing reads that is looking for two positions, one for a postdoc Ph.D. graduate and a research assistant who is already an employee of an accredited U.S. university, college or U.S. government laboratory,
The job listing gives an example of the research approach:
“This project should leverage all available information as well as recent breakthroughs in applied statistics, artificial intelligence, and deep learning to determine the most likely scenario(s) for how the U.S. dollar loses its status as the world reserve currency, why that scenario(s) is most likely, and in what timeframe this scenario(s) could unfold. It should also detail the impact of that status loss on the U.S., its economy, and national security. Further, the proposers should consider scenarios or events that would undermine this thinking and identify root causes and driving factors. Applying new approaches to considering risk and evaluating a range of future outcomes would be essential to developing a solid fundamental understanding of potential futures and enabling the Intelligence Community to develop strategies to anticipate developments, and identify and warn of emerging risks and vulnerabilities as early as possible.”
The job listing further counts the advantages the U.S. national security has with a dominant dollar as a world reserve currency.
“There are many advantages for U.S. national security to have the U.S. dollar as the world reserve currency. Any international transaction settled in US dollars, gives the U.S. jurisdiction over financial crimes associated with those transactions, to include support to terrorism and weapons-of-mass destruction (WMD) proliferation. In addition, the U.S. is able to effectively level sanctions against or designate entities that violate international laws or treaties, or that have the potential to cause financial instability in global markets”
At the same time, calls for the creation of a digital dollar have been growing. The Digital Dollar Foundation was created by Christopher Giancarlo, ex-chairman of the Commodity Futures Trading Commission. He is the same person who said that in 2017 the CFTC was responsible for poping the bitcoin bubble.
Since that bitcoin did not regain the ATH levels reached in 2017 but bitcoin is already more than 40% up this year. Many expected that the government will be successful to stop bitcoin adoption but the decentralized nature of the digital asset makes this job impossible.
Also Facebooks Libra aims to become a bitcoin rival with the large reach Facebook already has with its social media. However, it is not sure if it will be really a bitcoin competitor, because a corporate coin is centralized.
Bitcoin was launched in the middle of the 2008 financial crisis as a revolution against our monetary system. By design, bitcoin was created as a peer to peer, censorship-resistant payment system.
Bitcoin creator wrote back in 2008:
“Governments are good at cutting off the heads of centrally controlled networks like Napster, but pure [peer-to-peer] networks like Gnutella and Tor seem to be holding their own.”
Bitcoin is here to separate the money from the state and is on a good path to accomplish this mission. Bitcoin is also helping in countries where the monetary system has failed.