Taiwan and geopolitics of Bitcoin

The diplomatic crisis unleashed in Taiwan risks accelerating dedollarization and causing a shortage of semiconductors. This bodes well for bitcoin in the long run.

Nancy hopped on Taipei

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

“Our visit reaffirms that America stands with Taiwan, a robust and vibrant democracy and our important partner in the Indo-Pacific region. »

The parachuting of Nancy Pelosi comes after multiple warnings, in particular from the Chinese Minister of Foreign Affairs who warned that “Taiwan’s reunification with the mainland is a historical fatality.”

[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 had met a week earlier with his American counterpart. Seeing a diplomatic delegation land in Taiwan so soon after is therefore a humiliation for Xi Jinping. And losing face is unforgivable in Chinese culture.

The military exercises and the firing of missiles fed in the direction of the Taiwan Strait proceed from the fact that the Rubicon has indeed been crossed. Representations will be inevitable, in pure Sun Tzu style: paid, strategic, tough and spread out over the long term.

China has already banned silica sand exports to the island. A hard blow since this raw material is essential to the flagship of Taiwanese industry: that of 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 U.S. chip developers rely on TSMC’s advanced technologies that manufacture chips in three nanometers. The latter are essential for smartphones, supercomputers, data centers, or even the American army’s F-35 fighter planes.

It is no coincidence that Nancy Pelosi met 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 which offers a jackpot of 52 billion to Taiwanese companies that will take the plunge.

All this to say that it is very likely to expect massive inflation to hit electronics. This is the first reason why the Taiwanese crisis is going in the direction of 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 holding of US Treasuries

Beijing will surely seize this opportunity, especially since the Russian Foreign Minister has been touring the world for some time to encourage countries to stop trading in dollars.

For Mr. Parsi, director of the Swedish Institute of International Affairs, China will be “the key player of dedollarization, while “Russia will weigh heavily in this process”.

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

The question of creating an international reserve currency based on the basket of currencies of our countries is under consideration.said President Putin during the fourteenth BRICS summit which took place 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. And given the risk of military confrontation, the world would badly need a STATELESS, anti-inflationary and censorship-resistant: bitcoin.

This last characteristic has become a priority given the recent freezing of Russia’s foreign exchange reserves (150 billion dollars and 150 billion euros).

That said, bitcoin’s absolutely limited money supply is also appreciable. It is indeed 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 ” Holy Grail “ international payments:

“The Bitcoin network (completed with additional layers such as the Lightning Network to ensure high throughput of fast transactions) could be the holy grail of international payments. The whole world can use Bitcoin ‘as is’, […] without any additional investment. This is because the conversion of devices 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 of the world’s foreign exchange reserves. That is the equivalent of 12 trillion dollars. On that day, a single bitcoin will be worth over $600,000.

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Avatar Nicolas Teterel

Nicolas Teterel

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

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