President Vladimir Putin and China’s XI Jinping met in Moscow as part of a three-day visit by the latter. This meeting can have political and even more importantly economic ramifications for the world. The two eastern bloc giants are definitely a force to reckon with in many sectors.
Historically, the two have sought to provide a different axis for world power. Since the cold war ended, the USA has definitely had the upper hand as the all-powerful superpower. With the rise of China, and the resilience of Putin’s Russia, many analysts are speculating on the future. In the meeting, the two countries reportedly discussed Ruble and Yuan settlements instead of using the USD. Talking to journalists, President Putin said:
“Russia and China intend to develop the practice of settlements in national currencies.”
One thing that entrenched American dominance is certainly the universal appeal of the USD. As long as it remains the standard of trade, especially oil, the USD will remain on top. For Putin and XI, however, this has to be an aspect of world politics and economics they want to change. An alternative to them would be important for decentralization of world power and reduction of dependence.
De-dollarization is just a fancy term for weaning off the USD. The fact that Putin and Xi are holding on this does not mean a de-dollarized world would only fit their interests. At the moment, the US Federal Reserve is arguably the most powerful financial institution in the world. This is something cryptocurrency could have a say about.
The Space for Crypto in This New World
In terms of an independent, alternative medium of exchange, there is probably nothing better than crypto. This is because it is immutable and not subject to centralized institutions like the Federal Reserve. Bitcoin is a global standard that does not convey sovereignty to a particular country. As such, it is a great alternative currency that makes it ideal for those seeking de-dollarization.
Now, it may be painfully ironic for anyone to link a summit involving China with growth in crypto. This is because China has the harshest laws on crypto exchange and ICOs in the developed world. Russia is no paradise either with the government maintaining a cautious stance on virtual currencies.
Nonetheless, the fact that there are parallels between the two phenomena is noteworthy. This is because both these powers and crypto can change the power dynamics of the financial world. Russia and China take the approach of political and economic ties. On the other hand, cryptocurrency blows the system up from the ground with a complete alternative.
Bitcoin is as much a political statement as it is a currency. The word to have in mind in this is control. Cryptocurrency seeks to vest control back in users’ hands as well as being a medium of exchange. Russia and China may do it for their own ends, but well, the effect remains the same.
In the end, the financial world can go through a transformation from either side. This is something that could take a long time to come about. Regardless, the seeds of change have been planted and it is only a matter of time.