Globalism implies the implementation of activities or planning of economic and foreign policy taking into account the world perspective. This ideology implies the unhindered movement of people, goods and information between countries. Ideally, we will get a socio-economic system focused on free trade and free access to markets. In fact, this is the opposite of nationalization.
Nevertheless, globalism is a complex concept. Some interpret it as the predominance of the interests of the whole world over the interests of individual countries. There are also those who consider the whole world to be exposed to the threat of political domination by one particular country.
Recent events have shown differences in approaches to globalization, as two different ideological systems compete for world domination. Against this background, technological progress has given us a whole class of assets competing with fiat currencies.
Cryptocurrencies reject the very idea of any government control over the money supply, returning the pricing of currencies to open and transparent markets, increasing the processing speed and efficiency of transactions, as well as simplifying their accounting.
Globalization and cryptocurrencies can go hand in hand, despite different ideological approaches to the development of the world economy.
High technology is blurring the boundaries
Those of us who were born in the 1960s and 1970s witnessed technological progress firsthand. Computers and other tools for improving employee efficiency have appeared in the workplace.
Technological advances in the field of mass media have bombarded us with such an abundance of options that it is impossible to count them. As a result, communication has become easier.
Smartphones, which have become part of everyday life, allow not only to communicate with people around the world. They have also incorporated cameras, calculators and many other devices, and you can even control them using voice commands. Artificial intelligence programs analyze our actions, predicting our next search query. Advances in AI have also made our lives more public.
While over the past 60 years the world’s population has grown from three to eight billion, high technology has made the world much closer.
Arguments in support of blockchain
In 2008, Satoshi Nakamoto (who can be either one person or a group of people) published an article titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. His creation, as well as other altcoins, are built on the basis of blockchains — distributed databases that store information about changes made to them.
Blockchain as a technology was born in 1991, when scientists Stuart Haber and Scott Stornett were looking for a practical solution for “marking” digital documents in order to avoid their forgery or dating retroactively. Nakamoto took the blockchain theory and put it into practice, referring to the work of Haber and Stornett in his paper.
Blockchain is a secure and decentralized register of transactions, guaranteeing the accuracy and security of data recording without the need to involve a third party.
The difference between a traditional database and a blockchain is the structuring of the data. The blockchain collects information in groups (or blocks).
The blocks have a certain storage capacity. When filled in, they are closed and linked to previously calculated blocks, creating a data chain.
Decentralized blockchains are immutable; once made, changes cannot be undone. Transactions are constantly recorded and are available for viewing to all network participants. Blockchains are often called distributed registries.
In recent years, one could hear a variety of opinions regarding cryptocurrencies. Nevertheless, almost everyone agrees that the underlying blockchain technology is revolutionary, as it has allowed finance and other business areas to move into the technological era.
The Russian-Ukrainian conflict has divided the world
The US dollar remains the world’s reserve currency. Reserve currencies are used by countries for trade and as components of gold and foreign exchange reserves. The dollar occupies its position thanks to the political and economic stability of the United States.
China and Russia are considered ideological opponents of the United States, and in recent years they have actively reduced their dependence on the dollar. China, for example, is the largest producer of gold, actively buying it from domestic companies.
China is also working on a tighter integration of the yuan into the global financial system.
Russia is the third largest gold producer in the world, and it is also increasing its metal reserves at the expense of domestic companies. However, Moscow chose to bet on the euro rather than the dollar.
While the hostilities formally began on February 24, 2022, the turning point could have occurred on February 4.
It was then that Russian President Vladimir Putin and Chinese President Xi Jinping met at the opening ceremony of the Winter Olympic Games in Beijing. They agreed on a $117 billion trade package and, more importantly, agreed on “unlimited” cooperation in the framework of confrontation with the United States, Europe and their allies.
The alliance has probably untied Russia’s hands militarily. The next step may be the forced reunification of mainland China and Taiwan.
The nuclear powers are now divided into two opposing blocs. On the one hand, China, Russia, Iran, North Korea and their allies are located, and on the other — the United States, Western Europe, Japan, Canada, Australia with their allies.
While some countries remain neutral, the opposition of ideologies is obvious. The Ukrainian crisis poses a significant threat, given the “limitless” cooperation between Moscow and Beijing, which severely limits the effectiveness of anti-Russian sanctions.
When will “digital money” appear on the market?
China has made the most significant progress in developing a digital version of its national currency (which may one day become a reserve). On January 4, 2022, China launched a limited digital yuan test using the e-CNY mobile app, conducting tests in ten regions of China, including Shanghai and Beijing.
The decree of US President Joe Biden dated March 9 outlined the administration’s plan to “ensure responsible innovation in the field of digital assets.” One of the initiatives suggests that:
“It will be in the national interest to conduct an analysis of the US central bank’s digital currency (CBDC) by urgently studying and developing a potential CBDC.”
The decree further emphasizes that the administration wishes to:
“Prioritize U.S. participation in experiments with several countries and ensure U.S. leadership at the international level in the development of CBDC, which corresponds to the priorities and democratic values of the United States.”
Nevertheless, the United States lags far behind China in the issue of “digital money”. In fact, the global confrontation has put China in the lead of the race.
Are there any candidates for the title of digital reserve currency?
The bipolar world is ideologically incompatible with the libertarian approach of digital assets. For this reason, bitcoin, ether and other cryptocurrencies (of which there are more than 18,100) are likely to survive, unless governments decide to ban them completely.
In 2021, the American billionaire and hedge fund manager Ray Dalio, said that in the event of a resounding success of bitcoin, regulators would “kill him.” The decree published last week shows that the US government does not seek to kill the market; its task is to regulate in order to prevent systemic and other risks.
I believe that the digital versions of the yuan and the dollar will have to come together in battle. The chances that bitcoin or any other cryptocurrency will take the lead are very small. However, as the population trusts their governments less and less, independent cryptocurrencies will play an increasingly important role in the global financial system.