By Space Coast Daily // May 16, 2021
The gusto with which cryptocurrencies have engrossed major superpowers of the world in terms of financial transactions, the influence of blockchain and cryptocurrencies in the geopolitical sector is nothing mysterious.
China and U.S.A being at the end, the U.K and India had also begun stepping into its shoes. The world is an ever-evolving sphere of change and from the standpoint of economics, finance is changing too.
The war on being world superpowers is no new news to the crowd although in the contemporary economic setup the war is apparently concerning cryptocurrencies. Already, China and The United States of America, the two primary world powers, are enmeshed into a war on trade where tariff bids are made on goods and services. This gradually causes businesses and consumers to fall intermediate between services and currency.
Blockchain and crypto are causing new challenges to surface in the geopolitical sector where the dramatic turn of events have two impacts. Firstly, it has the capacity to cause disruptions in world economies by wreaking havoc on the economic markets, affecting rates of employment and causing several major companies to lose monetary value.
Secondly, blockchain and crypto enthusiasts have begun advocating the upper hand of cryptocurrencies in the economy which has been expected to make international transactions less expensive and faster, to un-demarcate borders, and to also encourage the practice of trade among nations. The blockchain geopolitical drama is now being inspected to oscillate between the East versus the West or small countries versus the big countries.
Geopolitical tension between countries
Regarding the geopolitical challenges facing cryptocurrencies, North Korea has already encountered allegations of instigating cyber attacks on the neighboring major exchanges of South Korea as well as few other parts of Asia. It has been said that some experienced groups of hackers were the reason behind companies losing millions of dollars while heavily shaking customer’s trust and confidence.
Similarly, India has also been trying to determine its decision on putting a ban on cryptocurrencies although this means that this phenomenon could ramify Facebook operations since it seems to introduce a stablecoin that would help the financially underprivileged. On the other corner of the world, the European Union and the United States of America are facing geopolitical tension regarding the Libra Project, a digital currency operating under blockchain-based payment system, introduced by Facebook. This could make or break the stand of traditional currency within the countries.
There are several reasons behind regulation of cryptocurrencies, one among which is the fragmented and disjointed regulatory approach around the globe. Different countries are taking different stances on the concept of crypto and it is not far from the day that countries would clash with each other in order to hold blockchain-based geopolitical authority.
For instance, countries like India are taking the strict approach towards regulating the use of cryptocurrencies. Anyone found to handle the tokens and coins are heavily penalized under the Indian legal system with a mandatorily proposed jail term.
While China and Japan are holding a laidback response towards cryptocurrencies where users are encouraged to innovate and invest. This primarily means that taxes could be paid using cryptocurrencies such as bitcoin. Also, trade between countries that use bitcoin as a form of payment would help generate more profit as the worth of cryptocurrencies are higher than traditional currencies. This method of trade can be initiated through bitcoin software’s such as official Website
In the geopolitical framework, Bitcoin can be useful for testing crypto-based products on a small part of the population prior to being launched in the market, thereby creating a regulatory box.
The alarming aspects regarding the geographical use of cryptocurrencies is the pressing and real divide when it arrives at accepting blockchain and cryptocurrencies within a country. Few countries are still resistant to accepting this ultra-modern form of transaction as it requires maximum caution when dealing with the type.
Another alarming aspect of blockchain geopolitics is the fear that some countries might utilize its resources and knowledge in order to develop its own cryptocurrency and a centralized bank for the virtual currency. This would not only pave the path for early supremacy but also trigger several trade wars.