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BRICS Nations Challenge Dollar Dominance, Pushing for Hyperbitcoinization

Author

Jay Solano

Tags

Reading time

6 mins
Last update

Author

Jay Solano

Tags

Reading time

6 mins
Last update

Author

Jay Solano

Tags

Reading time

6 mins
Last update

brics

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Since the conclusion of World War II, the United States has consistently held the position of the largest and most influential global superpower. During the Cold War, the Soviet Union fought for supremacy but ultimately failed because it lost control of its satellite states. When the Berlin Wall fell in 1989, this became evident.

In recent years, American authority has been challenged by China, a country that has amassed immense wealth since opening its economy to the rest of the world. China appears positioned to seize global power as it proceeds to indulge in the form of financial imperialism across the world. 

Today, Russia and China are members of the BRICS group, including Brazil, India, and South Africa, with other nations, such as Turkey and Saudi Arabia, possibly waiting in the wings.

In case you haven’t observed, the world is enduring a significant fundamental change, with BRICS at its center. As banks around the globe experience failures, historic peace negotiations are taking place between Saudi Arabia and Iran, and nations are starting to move away from the U.S. dollar as the global reserve currency.

An essential matter to contemplate is how global politics and macroeconomics influence the future of a hyperbitcoinized world. While acknowledging that predicting the future with complete certainty is impossible, this intends to present a perspective on the evolution of game theory over time.

Over the next few decades, the global economy will undergo three phases as a result of the rise of BRICS as an alternative to U.S. hegemony. The first phase will be characterized by a transition from a unipolar financial system to a multipolar one. In the second phase, many nations will adopt Bitcoin as a medium of exchange and unit of account. Finally, the third phase will bring about hyperbitcoinization.

Phase One: A Move From USD To Gold

We are already in the early phases of phase one and the formation of a multipolar world, although the vast majority of people need to be made aware of this.

During the 1970s, the Nixon administration made a deal with Saudi Arabia in which the country agreed to price its oil in U.S. dollars in exchange for military protection. As a result, other nations were forced to hold U.S. dollars, effectively establishing the dollar as the global reserve currency.

Whenever the US government chooses to increase the money supply, it can obtain oil at no cost. As the world’s reserve currency, U.S. treasuries have become the safest asset for investors to hold. Since the United States can print indefinitely, there is no possibility that it will default on its own debt, according to the general consensus. For over fifty years, nation-states have purchased immense amounts of U.S. debt.

However, this is no longer true for all nations. China and Russia have decreased their Treasury purchases over the past decade. Instead of holding U.S. debt as an asset, they have been accumulating gold reserves. India is also accumulating a gold reserve. The BRICS nations are working toward a return to the gold standard. 

Under this system, currencies would again be pegged to a finite commodity that has been used as a store of value for millennia. Given the difficulty of transporting and securing physical gold, it is unlikely that these states will resolve the majority of their transactions with it. What is certain, however, is that Russia now accepts rubles, yuan, and possibly shortly, rupees as payment for its oil. 

During this phase, a minority of nations will continue to decrease their holdings of U.S. Treasuries, conduct transactions using foreign currencies, and accumulate as much gold as possible.

The majority of the world, especially the West, will continue to operate as it has since the 1970s. Many nations will continue to be required to retain U.S. dollars in order to purchase oil. For the majority of American citizens, debt, stocks, and real estate will continue to function as a store of value. In addition, fiat currencies, especially the U.S. dollar, will serve as the predominant units of account. Thus, anticipate that this first phase will conclude within the next 20 years.

Many nations will likely default on their debts and experience currency collapses during this phase. They will begin conducting local transactions in U.S. dollars, as some nations still do today. Increasing debt-to-GDP ratios, inflation, tax increases, and unemployment will result in widespread unrest. Governments will urgently require a solution to an intractable problem.

Phase Two: Global Financial Shift To Bring Radical Changes

There will be no option in phase two but to adopt a radically new monetary system. As per the prediction, it is expected that in the future, many countries outside of BRICS will quickly embrace Bitcoin and use it as both a medium of exchange and a unit of account. This implies that everyone is paid in Bitcoin and utilizes the cryptocurrency as a store of value. 

People will still own real estate but purchase it as a place to call home instead of a location to store their wealth. Equities will continue to be purchased and traded, but Bitcoin will be regarded as the primary method of saving for all individuals.

In the future, people may view real estate as a means of having a place to live rather than an asset for storing their wealth. While equities will still be bought and sold, Bitcoin could become the preferred way for individuals to save money. Those who have been hoarding Bitcoin for years will become obscenely wealthy within a very brief timeframe.

As a result of the BRICS countries’ estrangement from the rest of the globe, globalization will have less of an impact during this phase. China and Russia will conduct almost all their trade with their allies, weakening their economies. Competing states will produce gold, and the dominant unit of exchange will fluctuate over time. Phase two will occur faster than phase one, in as few as ten years.

Phase Three: The Rise Of Hyperbitcoinization

The final and third phase is simpler. The majority of the globe will have adopted a Bitcoin standard. Those nations that have yet to notice the increased affluence and standard of living abroad will begin to do so. El Salvador will have become one of the world’s wealthiest nations by this time. Isolated from the rest of the world, nations that still use the gold standard will suffer economically. The current system will lose credibility.

Additionally, people will perceive that gold is an inferior store of value compared to Bitcoin. Gold authenticity verification is challenging. Transporting and securing it is an additional burden. Russia, China, and their allies will have no choice but to adopt bitcoin as their local unit of account and medium of exchange. The third phase will also occur swiftly. This estimate will occur within five to ten years.

This is how the envisioned game theory developed over the next twenty to thirty years. The majority, if not all, of these predictions, will be incorrect. However, our world is indeed undergoing rapid change. Our monetary system is in disrepair. Indicative of this is the current financial crisis.Even if the majority of these predictions are incorrect, a return to a solid money system is imperative. In this point of view, Bitcoin is the only viable solution. It may be prudent to accumulate a few sats while you still can. You or your offspring may reap significant benefits in the future.