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US think tank report: Sino-US competition and Bitcoin as a tool for the United States
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2024-12-24 19:03 2,824

Compiled by: Golden Finance

Note: US Treasury Secretary-designate Scott Bessent once proposed the concept of "Global Economic Reordering".

Recently, the Bitcoin Policy Institute prepared a report "A "Global Economic Reordering:" US-China Competition and Bitcoin as Tool of US Statecraft" for Scott Bessent, Proposes to use Bitcoin to consolidate America’s financial dominance.

The following is a summary of the report:

The global monetary order is facing increasing pressure. Rising fiscal instability, rising debt burdens and escalating geopolitical competition are reshaping the foundations of international finance. Rivals led by are adopting strategies to reduce reliance on the U.S.-dominated dollar system, build alternative financial networks, and exploit vulnerabilities in the existing order to expand their influence. By issuing U.S. dollar-denominated bonds, building gold reserves, and advancing digital payment systems, it seeks to challenge U.S. dominance and reallocate global capital flows in its favor. These developments represent both a clear threat and a strategic opportunity for the United States.

To maintain its leadership position in an increasingly competitive environment, the United States must adopt a forward-looking strategy and redefine the conditions for global economic participation. This strategy must integrate currency, technology, industry, and geography to address structural vulnerabilities, strengthen the resilience of the U.S. economy, and counter the ambitions of competitive forces.

At the heart of this potential geoeconomic strategy is an updated monetary system - "Bretton Woods 3.0" - that combines the stability of traditional reserve assets such as gold and U.S. Treasuries with those backed by Bitcoin and the U.S. dollar. Stablecoins and other emerging financial instruments are combined. By leveraging these assets, the United States can modernize its financial architecture, stabilize its fiscal position, and enhance trust in the dollar system. Tools such as long-term bonds, a strategic gold revaluation and expanded swap lines would more closely align allies with U.S.-centric financial networks while creating buffers against fragmentation. In , revitalizing the U.S. industrial base, directing credit to strategic sectors, and achieving energy independence are critical to rebuilding economic strength. This effort requires a shift away from speculative financial practices and overreliance on short-term liquidity. Instead, recalibrating the way credit is allocated through mechanisms such as deregulation, strategic wealth funds, and financial sector reforms will ensure that investments drive long-term economic growth, technological innovation, and supply chain resilience.

On the international front, the United States can deploy its financial and technological advantages to create a durable geoeconomic bloc. Prioritizing access to U.S. innovations in artificial intelligence, energy systems, and digital infrastructure will provide a solid foundation for the alliance.Provide powerful incentives. These technologies are critical not only to global competitiveness but also to strengthening the cohesion of the U.S.-dominated economic system, providing allies with clear benefits of cooperation while denying adversaries access to the tools they need to challenge U.S. influence.

Bitcoin, often referred to as “digital gold,” provides the United States with a strategic advantage consistent with this strategy. Its scarcity, portability and decentralization make it an ideal complement to traditional reserve assets such as gold. By establishing a Strategic Bitcoin Reserve (SBR), the United States can diversify its balance sheet, hedge against systemic financial risks, and secure an asymmetric advantage over its competitors.

Bitcoin, as "digital gold", is increasingly adopted by institutional investors, enterprises and even enterprises, highlighting its practicality in the digital age. The United States is well-positioned to capitalize on this asset because we hold the most Bitcoin (~207,000 BTC), have the largest mining share (>35%), and are the safest and most popular among others exchange.

Bitcoin combined with U.S. dollar-backed stablecoins could enhance the global influence of the U.S. dollar network, especially in emerging markets where the long arm of digital authoritarianism is trying to gain traction. Supporting these instruments will put the United States at the forefront of financial innovation while strengthening the global dominance of the dollar system.

This strategy is not just about financial competition, it is a blueprint for ensuring economic leadership, stabilizing fiscal vulnerabilities, and maintaining technological superiority over near-peer competitors. By coordinating currency reform with industry and the international economy, the United States can determine the contours of a reimagined global order that resets on terms conducive to our security and continued prosperity.

In the past few years, central banks of various countries have continued to increase their purchases of gold, a phenomenon that has attracted people's attention. However, recently some have also begun to move towards Bitcoin, a move that is less obvious. Gulf and others may have begun diversifying into Bitcoin. President-elect Donald Trump’s election and pro-Bitcoin rhetoric may have fired the starting gun in the race for Bitcoin adoption by sovereigns and institutions around the world. Even though we've started this race, the United States still risks falling behind.

The stakes could not be higher. Without action, the United States risks losing ground to adversaries seeking to destroy the foundations of its economic and geopolitical power. By taking a bold, comprehensive approach—underpinned by modernizing reserve assets, industrial revitalization, and technological leadership—the United States can solidify its position as the cornerstone of global stability and prosperity in the 21st century.

Keywords: Bitcoin
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