Taiwan and Bitcoin geopolitics

Taiwan and Bitcoin geopolitics

Because of the diplomatic crisis that has arisen in Taiwan, there is a risk that denuclearization will accelerate and that a shortage of semiconductors will be created. This bodes well for bitcoin in the long run.

Nancy jumps on Taipei

The speaker of the US parliament is the highest American official to visit Ilha Formosa in 25 years. A visit that provoked Ireland from China, which he sees as a provocation.

“Our visit confirms America’s commitment to Taiwan, a strong and vibrant democracy and our important partner in the Indo-Pacific region. »

Nancy Pelosi’s parachuting comes after multiple warnings, most notably from China’s Foreign Minister who warned that “Taiwan’s reunification with the mainland is a historic death.”

[Rappel historique : le gouvernement de la République de Chine se réfugia à Taïwan après avoir perdu la guerre civile contre les communistes. Dans les faits, Taïwan n’a jamais proclamé son indépendance et chacun revendique la légitime souveraineté sur tout le territoire chinois (Chine continentale et Taïwan).]

The crux of this diplomatic scandal is that the Chinese president met his American counterpart a week earlier. It is therefore very humiliating for Xi Jinping to see a diplomatic delegation in Taiwan soon after. And one cannot lose in Chinese culture.

Military exercises and heavy missile fire towards the Taiwan Strait also suggest that the Rubicon has indeed been crossed. Retaliation will be inevitable, in true Sun Tzu style: calculated, strategic, tough, and long-term.

China has already banned silica sand exports to the island. A hard blow since this raw material is essential to Taiwan’s flagship industry: semiconductors.

Semiconductor technology is at the heart of the fight for technological supremacy and Taiwan happens to be the world leader. Its market share is 66% according to Nikkei Asia!

Many American chip developers rely on TSMC’s advanced technologies that manufacture chips in three nanometers. The latter is essential for smartphones, supercomputers, data centers, or even the American army’s F-35 fighter planes.

It is no coincidence that Nancy Pelosi met with the leaders of this industry during this whirlwind passage. His goal was to convince the giant TSMC to relocate to the United States. This maneuver comes a week after the vote of the American CHIPS act that offers a Jackpot of 52 billion to Taiwanese companies that will campaign.

All this to say that it is very likely to expect a huge inflation that hit electronics. This is the first reason why the Taiwanese crisis is going towards bitcoin.

Will China sell US debt?

The second reason is that the Middle Empire could get rid of its 980 billion US debt. Or about 3% of all US public debt:

China's possession of us treasures

Beijing will surely take this opportunity, especially since the Russian foreign minister has been on a tour around the world for some time to encourage countries to stop trading dollars.

For Mr. Parsi, director of the Swedish Institute of International Affairs, China will ” the key player of dedollarization, although “Russia will have a lot of weight in this process”.

The BRICS club is also discussing a new reserve currency based on the IMF’s SDR. That is, a currency backed by a basket of currencies.

The issue of creating an international reserve currency based on the basket of currencies of our countries is under consideration.President Putin said at the fourteenth BRICS summit last July.

Not to mention the fact that Saudi Arabia is considering joining the BRICS. This rapprochement may suggest that Riyadh intends to stop selling its oil exclusively in dollars…

Be that as it may, there is no longer any doubt that the international monetary system is about to change profoundly. Given the risk of military conflict, the world would be in dire need of a staunch state, anti-inflation and anti-censorship: bitcoin.

This last characteristic is now a priority in light of the recent freeze on Russia’s foreign exchange reserves (150 billion dollars and 150 billion euros).

That said, the limited money supply of bitcoins is also significant. It is not certain that a basket of currencies eaten away by inflation will be unanimously accepted to replace the greenback…

Even the ECB wonders if bitcoin would not be the “The Holy Grail” international payments:

“The Bitcoin network (complete with additional layers such as the Lightning Network to ensure high throughput and fast transactions) could become the holy grail of international payments. The whole world can use Bitcoin ‘as is’, […] no additional investment. This is because the currency conversion takes place outside the network. »

In other words, bitcoin is already ready to use. It is a turnkey international monetary system that will soon swallow up all the world’s foreign exchange reserves. That equates to 12 trillion dollars. On that day, one bitcoin will be worth more than $600,000.

Get a summary of the news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential Cointribune!

Nicolas Teterel avatar

Nicolas Teterel

Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.

Solana : une lueur d’espoir pour les investisseurs

Solana: a sign of hope for investors

How to buy Ethereum (ETH) at a better price?

How to buy Ethereum (ETH) at a better price?