Could Bitcoin Become a Global “Peace Currency?”

In a recent interview with Bitcoin Not Bombs, Angela Keaton of Antiwar.com said something that got me thinking:

Cryptocurrency is a good thing, it allows you to be anonymous and that’s just one aspect of it (part of the privacy), but it allows you to spend money outside of the empire. As one Ron Paul kid I met in Chile said,

“You’re not using blood money anymore.”

Beyond the obvious application Keaton is talking about, I can think of another: As activists on all sides of foreign policy have noticed, money (in one form or another) is usually the root casus belli in any war. And manipulation of money is frequently a weapon in foreign relations approaching, but short of, open war.

Many twists of US foreign policy can be traced, directly or indirectly, to the US dollar’s status as “the world’s reserve currency.” Countries holding a lot of US dollars (or a lot of US government debt) enjoy an advantageous, but also a love-hate, relationship with the US government. As is noted in Wikipedia’s article on reserve currencies, “Various political leaders from Russia and China have called the world to move towards a super-sovereign reserve currency.”

Presumably these leaders are thinking of something like the euro, a currency issued/backed/recognized by a number of governments. But wouldn’t it be even better to have a “global reserve currency” that, in addition to being truly transnational, is simply not subject to control or manipulation by any government whatsoever?

Because Bitcoin is globally available and globally tradable, it serves the “reserve currency” function of facilitating cross-border trade in a way that’s immune to local currency fluctuations quite well. And because it’s issued and traded using an open source system that’s at least theoretically immune to some forms of political manipulation (e.g. a government turning on its printing presses to cover debt and so forth), it would be difficult to use as an instrument of economic war. Even if one government did use brute force to manipulate its value (by, for example, acquiring large quantities of it and then either holding them out of, or dumping them into, the market), that government would presumably be damaging itself as much as it damaged any other government.

I don’t know if Bitcoin in particular is the “global peace currency” I’m envisioning, but it seems to me that Bitcoin or something similar is likely to move to the fore as a global reserve currency in the not too distant future. The US has played too many games with the dollar to be trusted.

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