-----------
close
The BRICS' Potential Move Towards Bitcoin

hilltopads

Could BRICS nations be on the verge of adopting Bitcoin? This is the perspective shared by VanEck's head of research.


The BRICS' Potential Move Towards Bitcoin


Bitcoin Mining Among BRICS Nations

Matthew Sigel recently suggested on CNBC that BRICS nations are showing considerable interest in Bitcoin. According to him, the BRICS countries now have a combined GDP that surpasses the G7, and several new member countries, including Argentina, the United Arab Emirates (UAE), and Ethiopia, are involved in Bitcoin mining with government support.

Although Argentina is not officially part of the BRICS, its national power company YPF has partnered with Genesis Digital Assets from the U.S. to utilize excess gas from oil fields for Bitcoin mining. Meanwhile, the UAE’s sovereign fund has collaborated with Marathon Digital Holdings, managing around 400 megawatts of mining capacity in Abu Dhabi, which represents roughly 3% of the global Bitcoin hashrate. Ethiopia is also leveraging its abundant hydropower resources for Bitcoin mining.

As for Russia, Sigel mentioned that the Russian sovereign wealth fund is investing in infrastructure projects to support artificial intelligence and Bitcoin, aiming to facilitate international Bitcoin transactions. Recently, the Russian Parliament passed legislation favorable to the Bitcoin industry, with Russia’s Kickex CEO Anti Danilevski estimating that Russia contributes around 17% of the global Bitcoin hashrate. Additionally, the Russian Central Bank launched an experimental platform for cryptocurrency transactions in September, potentially to bypass sanctions. Sigel speculates that Russia may openly endorse Bitcoin if the United States makes a similar move.


Bitcoin's Role in the U.S. Presidential Election

Bitcoin has emerged as a key topic in the current U.S. presidential race. The Republican candidate, acknowledging the significant number of Bitcoin investors among voters, has embraced Bitcoin. Should he win on November 5, Donald Trump has pledged to create a “strategic reserve of bitcoins,” while also committing not to sell the government’s current holdings of 200,000 bitcoins from legal seizures.

Furthermore, Republican senators are working on legislation that would create a national Bitcoin reserve of one million bitcoins. A Republican win could encourage other nations to consider Bitcoin as a global reserve currency, especially given its finite supply, which differentiates it from gold. Unlike gold, Bitcoin’s supply is progressively limited, with mining difficulty increasing every few years.

Bitcoin’s decentralized nature positions it as a viable medium for international transactions. As Marathon’s CEO emphasized during a recent Dubai conference, Bitcoin’s strategic value as a reserve asset is gaining recognition, as governments anticipate a rise in Bitcoin’s share of global transactions.

The Decline of the Dollar’s Effectiveness

BRICS countries are increasingly looking to move away from the dollar, especially since two of its members, Russia and Iran, have been removed from the SWIFT network, with over 300 billion euros and dollars of Russian assets frozen. Several BRICS countries already conduct trade in their national currencies and use their versions of SWIFT (CIPS in China and SPFS in Russia). However, limitations remain, as seen when Russia refused Indian rupees for oil payments due to the rupee's poor stability and lack of demand in the Russian market.

Ultimately, BRICS will need a universally accepted store of value to balance trade surpluses and deficits. Gold once filled this role before the Bretton Woods system ended in 1971, but practical issues make it less suitable for modern commerce. Bitcoin, on the other hand, enables fast, low-cost transactions and is always accessible, offering a digital alternative to gold. If the U.S. takes the first step in accumulating Bitcoin, it could pave the way for a neutral international monetary system with Bitcoin as a primary, untouchable store of value—reminiscent of the Gold Standard era where international trade was on equal footing.

Post a Comment

Previous Post Next Post

mgid