BitcoinBTC, ethereum, XRPXRP and other major cryptocurrencies have exploded back into the limelight this year amid growing fears of a U.S. dollar death spiral “crisis” as the Federal Reserve prints $1 trillion every 100 days.
The bitcoin price has shot back to its all-time high of around $70,000 per bitcoin, pushing up the price of ethereum, XRP and the wider crypto market as Wall Street eyes a staggering $90 trillion bonanza.
Now, as Tesla billionaire Elon Musk and legendary investor Warren Buffett name the “true currency,” China and Russia have teamed up to create a payment system based on bitcoin’s blockchain technology—with one respected economist warning it could be “more dangerous for American hegemony than nuclear weapons.”
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“We believe that creating an independent Brics payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain,” Kremlin aide Yury Ushakov told Russia’s Tass news agency this week.
Bitcoin, as well as other cryptocurrencies such as ethereum and XRP, use distributed ledger technology known as blockchain to record and validate transactions without the need for a central authority.
“The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics,” Ushakov said.
The Brics, which include China, Russia, Brazil, India and South Africa, have in the last few years been looking for ways to end their reliance on the U.S. dollar, a trend which was accentuated by the U.S.-led sanctions placed on Russia following its invasion of Ukraine.
In 2022, Russia was kicked off the world’s main international payments network Swift, with a former Russian Central Bank deputy chairman warning it would cause a “catastrophe.”
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“The days of a dollar-centric world is over. That’s a reality. We have a multipolar global trading system today,” South Africa’s Brics ambassador Anil Sooklal said last year, it was reported by Fox Business.
Meanwhile, China has been slowly rolling out a digital version of its yuan, also inspired by bitcoin and crypto, in an attempt to both control the domestic flow of money among its citizens and compete with the U.S. dollar for global trade.
The so-called central bank digital currency (CBDC) exploded to total transactions of 950 million last year, with a cumulative value of 1.8 trillion yuan ($249.9 billion) by the end of June, up from 100 billion yuan ($13.9 billion) the previous August, it was reported by the South China Morning Post.
“If increasingly … capital flows migrate to the Chinese digital payment system … that is more dangerous for American hegemony than nuclear weapons,” economist Yanis Varoufakis, a former finance minister of Greece, said during an event at the Australia Institute this week.
“That is my explanation of why we have the intensification of the cold war between America and China.”
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