China’s Belt and Road Initiative (BRI) was first launched in 2013 by President Xi Jinping as a massive infrastructure development project extending from Europe to East Asia. The initiative, which has garnered the support of over 60 countries worldwide, is anticipated to significantly empower China’s economic and political influence.
Referred to as the “New Silk Road”, which rose during the Han Dynasty (206 BCE - 220 CE) and wove trade networks through what is now Kazakhstan, Uzbekistan, and Afghanistan, among others, the BRI roadmap includes the creation of railway networks, energy pipelines, highways, and streamlined border crossings. The original Silk Road made Central Asia one of the first epicenters of globalization, and the BRI has similar ambitions.
What are the global implications of the BRI?
As more countries sign on to various aspects of the BRI initiative, Syria has taken up a spot in line as well. Syria represented the first failed US intervention attempt as fellow BRI country Russia stepped in. Since Russia’s invited intervention in 2015, the Syrian government was able to take back control of nearly all of its territory from ISIS, pushing US military forces aside and negating their efforts. Should the US continue facing restricted ability to intervene abroad, its political influence would subside significantly as a direct parallel with its military presence.
Military force isn’t the only way the BRI disrupts US dominance. The initiative can further affect dominance by ceasing USD transactions between BRI member states. In this scenario, member states would need an alternative to USD, which would most likely be a form of cryptocurrency. As such, cryptocurrency can mean that it can easily be converted to Bitcoin, using it to transact globally and in turn trigger a mass adoption of BTC. Bitcoin would thus become the de facto true global currency, even while not endowed by any one country.
With Syria, Russia, and China united under the umbrella of the BRI, and many more nations showing interest in the initiative, the US can anticipate a decrease in influence and intervention ability which would reduce its stature greatly.
A New Wave of Globalization
This “New Silk Road”, and thus new wave of globalization, has the potential to align with the opportunities presented by Bitcoin’s own transcension of borders, transaction speed, and swift adoption rate, propelling the digital coin to be regarded as a natural substitution for USD, as far as the global stage is concerned.
The collapse of US dollar dominance has become a common topic of discussion, with many musing that USD could lose its status as a world reserve currency. It’s been noted that the US dollar’s status as such has been declining for years, with or without the influence of cryptocurrencies.
On the other hand, bilateral trade volume between two of the main BRI member states, Russia and China, has been steadily increasing, seeing a 31% spike in 2020 alone and exceeding $140 billion in 2021. If this volume were to be transacted in BTC instead of USD, it would most certainly propel its adoption and influence to new heights.
How does the New Silk Road lead to Bitcoin?
Should such a scenario unfold, and if you believe in the possibility that countries united under the BRI would edge out the US, you should think about investing in Bitcoin. Even better than investing, you should consider mining for yourself.
If you were to buy 1 Bitcoin today, you would own 1 Bitcoin. Three years from now, whether the price of Bitcoin goes up or down, you would still own 1 Bitcoin. With mining, you will eventually get a return on your initial investment, and by that point, it becomes a passive income while it continues to mine more Bitcoins. In the end, you end up with multiple Bitcoins while your initial investment amount stays the same.
In addition to providing passive income, Bitcoin mining hardware holds residual value that, should you sell it, would allow you to make back a portion of your initial investment. Selling your hardware also allows for an easy upgrade path to the latest units. This is the equivalent to a new iPhone model coming out; the latest model becomes available, and you can choose to sell your old one for the new version while the amount you can attain for your model remains attractive. Mining hardware is further classified as computer equipment; the IRS outlines that computer equipment is tax depreciable.
Becoming a Global Currency
As the Belt and Road Initiative portfolio of supporters continues to grow, it is more crucial than ever for the US to remain a world reserve currency. However, expansion of the BRI initiative will make it harder to maintain this status.
The US dollar also relies on exclusive use of the dollar by American citizens; adoption rates of Bitcoin and cryptocurrencies have soared over 880% in the last year, with more than 40 million Americans owning a share of Bitcoin.
Through mobile Bitcoin mining solutions, inflation hedge prospects, and a steep surge in users and investors, Bitcoin offers flexibility and autonomy that together pave the way to financial empowerment for citizens worldwide. Get in touch with a Wattum representative to learn more about your options today.