Who Else is Competing in Trump’s Race to Turn the US into a ‘Bitcoin Superpower’?
Quick Summary
US President Donald Trump aims to position America as a global “Bitcoin superpower,” but currently, no other major nation is actively competing in this race. While the US has taken significant steps, including establishing a strategic Bitcoin reserve, other major economies remain cautious or opposed to adopting Bitcoin as a reserve asset.
Trump’s Bitcoin Ambitions
Speaking at Blockwork’s Digital Asset Summit on March 20, Trump declared his intention to make the US the “undisputed Bitcoin superpower” and the global crypto capital. His administration has already introduced favorable executive orders, notably creating a strategic Bitcoin reserve.
Global Competitors: Where Do They Stand?
- China: Initially banned Bitcoin outright, now allows mining but prohibits Bitcoin transactions, focusing instead on its digital yuan.
- European Union: Passed the Markets in Crypto-Assets (MiCA) regulation, but remains cautious, with no member state adopting Bitcoin reserves.
- Switzerland and Germany: Central banks have explicitly rejected Bitcoin as a reserve asset, citing volatility and security concerns.
- Canada: Prime Minister Mark Carney has criticized Bitcoin as unsuitable money.
- South Korea: Bank of Korea rejects Bitcoin as a reserve asset due to volatility and IMF standards.
- Russia: Allows limited crypto use for international settlements and is experimenting with crypto trading, but has not established a Bitcoin reserve.
Criticism of the US Bitcoin Reserve
Experts and economists have criticized the strategic Bitcoin reserve:
- Eswar Prasad (Cornell University): Argues the reserve benefits Bitcoin holders at taxpayers’ expense and exposes the government to financial risks.
- George Selgin (Cato Institute): Believes the reserve’s goal of paying off national debt is unrealistic, noting the difficulty of selling Bitcoin without backlash from holders.
- Charles Edwards (Capriole Investments): Criticizes the reserve’s “hold only” policy as ineffective.
Impact on Bitcoin Price and Adoption
The announcement of the US Bitcoin reserve had minimal immediate impact on Bitcoin’s price. Critics argue that strategic reserves typically stabilize essential commodities, a role Bitcoin does not fulfill due to its volatility and limited public demand.
Future Possibilities
Currently, the US is leading a race with no clear competitors. However, political shifts in Europe and discussions in Brazil about potential Bitcoin reserves suggest the global landscape could change rapidly.
Key Points
- The US is currently alone in actively pursuing a national Bitcoin reserve.
- Major global economies remain skeptical or opposed to adopting Bitcoin as a reserve asset.
- Critics question the strategic value and practicality of the US Bitcoin reserve.
- Political changes in other countries could alter the competitive landscape in the future.
