⊙ Washington eyes Bitcoin to fill the vacuum left by the dollar's retreat without bearing the reserve-currency nation's burden of trade deficits

⊙ Bitcoin, an asset free of physical constraint and powerful enough to reduce geopolitical risk

⊙ A monopoly on Bitcoin mining helps oil drillers and the shale-region economy

⊙ The ‘Triffin Dilemma’: reserve-currency status → deepening trade deficits → weakening trust in the reserve-currency nation → collapse of confidence in the reserve currency itself

⊙ Trump's running mate J. D. Vance is a well-known Bitcoin advocate

Oh Tae-min

Graduated from the Department of Business Administration, Yonsei University / Former Adjunct Professor, Department of Blockchain, Graduate School of Information and Communications, Konkuk University. / Books: 《The Humanistic Imagination》 《The Economic Imagination》 《Bitcoin Was Strong》 《Smart Contracts: The Trust Revolution》 《Bitcoin, A Genealogy of Wisdom》 《The Metaverse and the Future of Money》 《Bitcoin, and the Geopolitics of the Dollar》

At a gathering of the Economic Club of New York on September 5, former President Donald Trump, the Republican nominee for president, declared that he would “embrace the industries of the future rather than attack them” and that he would “make America the world capital of cryptocurrency and Bitcoin.” At the ‘Bitcoin 2024’ conference held in Nashville in late July, he had likewise warned that if the United States did not step forward as a crypto-centered nation, China would take that place. He added that (should he take power) the U.S. government would strategically stockpile Bitcoin and would not sell it.

Is Trump's pro-cryptocurrency policy merely an election strategy? Or has he genuinely recognized the potential of cryptocurrency as an industry of the future, as the crypto camp has long argued?

Trump: “The SEC chair is suppressing the crypto industry” The news that Trump intends to make cryptocurrency a major issue in this presidential election is already widely known. Indeed, in December 2023 he issued an NFT collection using photographs of himself. The NFT was based on the mug shot taken when he was arrested in Fulton County, Georgia, on August 24, 2023, and was sold under the name ‘MugShot Edition.’ The NFTs were sold at $99 each, and buyers of 47 or more received a physical card containing a piece of the suit Trump was wearing when he was arrested, along with an invitation to dinner at Mar-a-Lago. Through this, Trump raised roughly $2.4 million.

There is an analysis that these moves by Trump put pressure on the Democratic administration. He criticized Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), and said that if he became president he would dismiss him. Trump argued that Gensler is ‘suppressing’ the cryptocurrency industry and that the SEC's regulation is obstructing the growth of cryptocurrency. There is also an analysis that the approval of the spot Bitcoin ETF in January 2024 and of the spot Ethereum ETF in May were political decisions made at the level of the Democratic Party in order to counter Trump's cryptocurrency election strategy.

For one thing, it is highly likely that Trump embraced Bitcoin with an eye on the votes of shale gas operators. Trump is known to be friendly to the American shale oil industry. Surprisingly, however, there were reports that the shale operators were not especially pleased at the prospect of Trump's re-election. This is because if a Trump government took office it would be likely to loosen permitting for the shale industry, increase output, and drive down international oil prices. The shale operators have already become vested interests, and falling prices are a disadvantage to them. For existing producers, it is more profitable for the government to block the entry of new competitors and maintain regulation. A Democratic administration, by contrast, has introduced various regulations, restricting permits for the shale industry and opposing pipeline construction, citing climate change and environmental pollution.

Trump's emphasis on Bitcoin mining may be a strategy conscious of the sentiment of these oil operators and shale regions. Shale oil incurs considerable cost because it moves from the production site to the point of consumption by truck or rail rather than by pipeline. As president, Trump would lower oil prices, but he would also be likely to move actively to solve this logistics problem. Yet environmental groups would resist by physically blocking pipeline construction, so even a Trump administration would find it hard to blanket the whole of the United States with pipelines.

Bitcoin mining carries the strategic value Trump emphasizes precisely in that it can be carried out directly at the site of oil production. Bitcoin mining can make use of the gas flare that is otherwise wasted at oil drilling sites. Major oil companies, including ExxonMobil, have adopted this approach as a way of maximizing revenue through Bitcoin mining. Operating mobile Bitcoin mining plants where the oil and gas are can be an economical and practical solution.

An American monopoly on Bitcoin mining helps oil drillers and the shale-region economy. Even if the price of oil falls, operators gain a means of maximizing their profit. This appears to be a new political calculus that uses Bitcoin as an election strategy while seeking to combine America's energy industry with cryptocurrency. Before we knew it, Trump has been rapidly absorbing specialized knowledge about Bitcoin mining and showing an ability to reflect it in policy on the basis of his own business experience.

An unprepared Korean government

Ten years ago, when I was spreading the word about Bitcoin, the objection I heard most often was: “The United States will not leave Bitcoin alone. America will surely punish any challenge to the dollar.” Yet looking at America today, not only the general public but even government officials appear bewildered.

When the United States approved the spot Bitcoin ETF this past January, in the small hours by Korean time, financial regulators on their way to work were questioned by reporters and offered a hard-line position of opposition. They even clung to a policy of refusing to permit financial products based on Bitcoin, taking no account of the Bitcoin futures ETFs already trading. In the end the presidential office in Yongsan stepped in and told them not to speak in such categorical terms. The ruling party at the time appears to have judged that the financial authorities' hard-line attitude would not help in the general election due in April.

As the election drew near, the two major parties issued one pledge after another friendly to Bitcoin and digital assets. There were signs that digital assets might emerge as a political issue in Korea as well, but because both ruling and opposition parties put forward similarly friendly pledges, it did not lead to differentiation and never rose far as a political issue.

Since the election ended in a landslide for the opposition, Korean politics has been absorbed in political instability and struggles for survival, and it is hard to expect any visible policy on digital assets. Society's leaders remain cautious, and companies are afraid to take concrete action on ‘coins.’ Considering the forward-leaning attitude of the United States and of governments around the world, the likelihood that Korea will miss an important opportunity is growing.

Why they fail to understand Bitcoin

Turning public opinion on coins 180 degrees in Korean society will never be easy. But Koreans have an extreme aversion to falling behind the currents of the world. Now, when Korean politics is all but paralyzed, we must once again pay attention to America's abrupt change. That is, we must return to the very inference by which Koreans misunderstood Bitcoin.

“The United States will not leave Bitcoin alone. America has never tolerated anything that challenges the hegemony of the dollar.”

And yet the United States is moving to embrace Bitcoin actively rather than suppress it. America's two parties are even competing with each other over cryptocurrency.

Ever since I discovered the value of Bitcoin, I have constantly urged the people I know to buy Bitcoin and study it. Many of those around me held doctorates in the humanities, and most of them did not understand Bitcoin.

It is not that they are unintelligent. What is it that they are missing? Why can they not see Bitcoin's true worth?

After long reflection, I realized that they regard the international order we currently enjoy as a ‘constant.’ They think of the global financial system, expressed as the ‘dollar order,’ as something fixed; and it was on this point that my thinking differed from theirs.

Bitcoin and the dollar reserve system

After stepping into the world of Bitcoin, I began to study geopolitics in earnest. Bitcoin and geopolitics are deeply connected. Bitcoin challenges the dollar, but we are living in the ‘dollar era.’ What, then, is the ‘dollar era’? The ‘dollar era’ means America's ‘era of trade deficits.’

The dollar reserve system operates on top of America's trade deficit. This is common sense to economists, but it is also the fact that diverges most sharply from the public's perception. Many people think that America can easily buy crude oil, cars, and semiconductors simply by drawing pictures with special ink on special paper. This is partly valid. The problem, however, is that other countries, however attractive their currencies may be, do not want to run them as reserve currencies the way America does. Because continuously recording a trade deficit means that manufacturing jobs flow out of the country.

This is why Germany's mark and Japan's yen refused the demand to shoulder the burden of reserve-currency status. These countries placed the emphasis on maintaining stable employment rather than on rapid growth. Manufacturing provides large-scale employment; this makes it possible to maintain a thick middle class; and this in turn brings social and political stability.

The shadow of the dollar reserve system

The Trump phenomenon, that is Trumpism, which for close to a decade now has driven American society into fierce controversy and extreme confrontation, is also closely related to this. In the 2016 election campaign, Trump criticized China, Germany, Japan, Korea, and even Saudi Arabia. He said these countries live better economically thanks to America's protection, and argued in particular that Germany and Japan, despite having been defeated in war by the United States, are now exploiting America economically.

Whether this is true is open to debate, but it is a fact that Trump's remarks became the driving force that moved the hearts of Americans.

J. D. Vance, whom Trump chose as his running mate, is the symbolic figure representing the ‘neglected American middle class’ that he claims to speak for. J. D. Vance was born and raised in a mining town near the Rocky Mountains, and the white people of that region were a forgotten presence in America as a whole. Their circumstances were entirely different from those of whites educated in the West and the East. They were left out even when minorities received institutional help to correct discrimination.

Many white people had migrated to and settled in this place, once the center of the mining and manufacturing that supported American society; but as American manufacturing declined, the whites of this region fell into a moral crisis. Fathers lost their authority within the household, and mothers gave up on holding the family together. Students, rather than going on to higher education, were swayed by the temptation of easy money, and the local community began to stagnate. Along with moral disintegration, drugs spread, and between drugs and crime the community declined further and further.

J. D. Vance became famous for 《Hillbilly Elegy》, a book containing his own experience and the stories of the people around him, and the book was made into a film as well. In effect, Trump named J. D. Vance as his running mate as the archetypal case of the ‘neglected American middle class’ he claims to represent.

The ‘Triffin Dilemma’ The dollar reserve-currency system can be seen as having brought about the crisis of the American middle class and as the cause of America's polarized politics. But the argument that the dollar reserve system is a burden on the United States is not a recent one. Back in the 1960s, Robert Triffin, a professor at Yale, explained the problem logically. The theory commonly known as the ‘Triffin Dilemma’ warned that a reserve-currency nation cannot avoid trade deficits, and that as those deficits accelerate, trust in the reserve-currency nation weakens and, in the end, confidence in the reserve currency itself collapses.

We must then ask the question this way. How has a reserve-currency system dependent on America's trade deficits been able to hold up for the past eighty years? And why is it only now that America's domestic politics is recognizing this problem anew and showing movements to overturn the global financial system?

To answer this question we must look at how the dollar-centered international monetary system was born and how it operated. After the Second World War the whole world enjoyed unprecedented peace and prosperity. There was not a year without a war, but neither was there a year in which the seas were blockaded and world trade paralyzed. This was thanks to America's guarantee of ‘freedom of navigation.’ Freedom of navigation is also an American ideal. The reason the trade order could be maintained even though local conflicts never ceased around the world was America's powerful naval force. The United States has spent close to a trillion dollars a year on defense.

The Bretton Woods system was born at an international conference held in 1944, before the Second World War ended, at Bretton Woods in the state of New Hampshire in the United States. The system was designed to stabilize the postwar international economic order; it made the U.S. dollar the reserve currency and, on the basis of a fixed exchange rate system, made the dollar convertible into gold. Through this the United States came to stand at the center of the world economy, and the dollar took on a central role in international trade and finance.

The ‘Nixon Shock’ By the end of the 1960s, however, the Bretton Woods system ran up against its limits. Because of the Vietnam War, excessive military spending, and the fiscal deficits that came with social welfare programs, the United States recorded enormous trade deficits. Confidence in the dollar weakened as a result, and many countries sought to exchange dollars for gold. In the end, in 1971, President Richard Nixon suspended the dollar's convertibility into gold, and the Bretton Woods system collapsed. This event is commonly called the ‘Nixon Shock,’ and thereafter the dollar shifted to a floating exchange rate system not pegged to gold.

The greatest victims of the ‘Nixon Shock’ were Japan and Germany. At the time these two countries were recording enormous trade surpluses with the United States, but they could not exchange their accumulated dollars for gold. France persistently demanded gold convertibility without regard for its relationship with the United States, but Japan and Germany could not make such demands because of their diplomatic relations with America. They had no choice but to buy American Treasury bonds instead. Some Japanese officials, judging the dollar's value unstable, argued for buying gold, but given the state of U.S.-Japan relations at the time this was an unrealizable demand. Nixon announced the suspension of gold convertibility on August 15, the date on which Japan surrendered in the Second World War, seeking to send Japan a political message.

The dollar reserve system and the freedom of navigation guaranteed by the United States are closely linked. During the Bretton Woods negotiations, the American representative Dexter White and the British representative John Maynard Keynes, in designing this system, built into it a tax structure important to the trade and economic order. American naval power was needed so that the principal sea routes, the Suez Canal, the Strait of Hormuz, the Strait of Malacca, the South China Sea, the waters between Taiwan and Okinawa, would not be cut off by war or by a blockade imposed by a great power. Maintaining that military force required not only the taxes of Americans but an economic burden borne worldwide. That burden was precisely the purchase of U.S. Treasury bonds.

The United States was almost the only country able to increase its bond issuance without being pressured by interest rates. Whereas ordinary countries risk provoking a recession through rising interest rates when they issue bonds, U.S. Treasuries enjoyed such worldwide demand that they could be issued without any worry about rising rates. The U.S. Congress has always agreed to increase the debt ceiling, and as a result the U.S. government's debt has grown astronomically.

The ‘Plaza Accord’

The United States can be likened to the owner of a poker house. If the other countries are the players, the United States not only runs the poker house but takes part in the game itself. As the poker game runs through the night, Japan and Germany stack up chips while the United States keeps going further into debt. But when the game is nearly over, the United States takes a tray around to Japan and Germany and collects some of the chips they have stacked. Only then can the poker house open again the next night, and only then can the United States keep taking part in the game.

The Plaza Accord is the representative case that shows well what role Japan played in maintaining the dollar-centered trade system. The Plaza Accord of 1985 was an agreement between the United States and its major trading partners, concluded for the purpose of lowering the value of the dollar and correcting trade imbalances. At the time, the Reagan administration, having confirmed that Soviet power had weakened, applied pressure to Japan. It forced Japan to choose whether it would take responsibility itself for the safety of the shipping routes across all of East Asia, that is, from the Strait of Malacca to Japan, or would comply with America's demands for market opening and for the appreciation of the yen.

Rather than sharply increasing its defense spending and moving once again toward becoming the hegemon of the Western Pacific, Japan chose to comply economically with America's demands. Through this accord Japan accepted a strong yen and took on the role of supporting the American economy. As the value of the yen rose, the Japanese economy in the short term enjoyed a boom driven by an asset bubble, but in the long term, after the bubble burst, it suffered more than twenty years of recession. Japan thus made an important contribution to maintaining the American-led international financial system, but took an economic blow as the price.

The rise of China

As the twenty-first century began, America's position gradually came under challenge. The rise of China and the global financial crisis of 2008 were especially important watersheds. The rise of China can be seen as the archetypal case in which the fruit born of a particular international order comes to shake that very order.

China made its full-scale entry onto the world economic stage through the reform and opening policy of the late 1980s. The United States and Western countries welcomed China's cheap labor and enormous market, and on this basis China achieved rapid economic growth. As time passed, however, China became not merely ‘the world's factory’ but an important axis of the world economy. On the strength of its economic power, China expanded its influence on the international stage and, especially in the Asia-Pacific region, began to challenge American hegemony.

The idea that China would challenge American hegemony was at first regarded as a fringe way of thinking. American politicians at the time did not see China's rise as a threat to the United States. It was America that led China into the WTO (World Trade Organization) and incorporated it into the world economic system, and America that opened the doors so that Chinese companies could advance onto the international stage. For China to challenge the American-led order was therefore regarded as China tearing down with its own hands the foundation on which it had grown. This was the general perception of the international community at the time. China had achieved prosperity through the American-led free trade system and appeared to have no intention of overturning it.

As time went on, however, this perception changed. Along with economic growth, China expanded its military power and diplomatic influence, and in the process situations in which it collided with American interests became frequent. In particular, its assertion of sovereignty in the South China Sea and the Belt and Road Initiative were interpreted as signals of a challenge to the existing order led by the United States and Western countries.

The global financial crisis

China's economic growth was intertwined with the expansion of political and military influence beyond mere economic prosperity. On the basis of its own economic growth, China pursued the Belt and Road Initiative, an enormous economic network linking Asia, Africa, and Europe, and expanded its global influence. The project was interpreted as an attempt to strengthen political and diplomatic dominance through economic support for developing countries. These moves aroused the wariness of Western countries such as the United States and those of Europe, and were regarded above all as a challenge to America's primacy.

China also sought military territorial expansion in the South China Sea, challenging America's maritime hegemony. It built artificial islands in the region and installed military bases, strengthening its claims of sovereignty; this was an act that directly challenged the principle of ‘freedom of navigation’ that the United States has guaranteed. To an America that treats freedom of navigation on the high seas almost as a national creed, a China claiming more than 90 percent of the South China Sea as its own territory was perceived as a force disrupting the order.

The global financial crisis of 2008 greatly shook confidence in America's financial system and in dollar hegemony. The financial crisis that began in the United States dealt a heavy blow to the world economy, and Western countries in particular fell into severe recession. Yet the country that cleaned up this crisis was China. China swiftly produced an economic revival package worth roughly $800 billion and, to keep its own economy from falling into the same turmoil as America and the West, began producing steel and cement in enormous quantities. As a result the world economy stopped its plunge, and the Korean economy in particular was able to get through the crisis without great damage thanks to China's demand-expansion policy.

The 2008 financial crisis that began in America also had a decisive effect on the self-consciousness of the Chinese. The question “Why should we help Americans who do not even save?” began to spread through Chinese society.

China halts purchases of U.S. Treasuries 2008 was the year in which the self-consciousness of the Chinese was elevated and the year in which their discontent and revulsion toward the West exploded. During the Beijing Olympics, the figure who effectively censored the whole of downtown Beijing in order to block interference by international political organizations was Xi Jinping, then the country's vice president. 2008 was precisely the important year in which Xi Jinping emerged before the public as a political leader. Then in 2012 Xi Jinping rose to the presidency and began transforming China in earnest.

After Xi Jinping rose to the presidency, China began to take a new course in its relationship with the United States, along with economic independence. The change in China's attitude toward American Treasury bonds in particular was an important signal. From 2012, China stopped actively purchasing U.S. Treasuries.

Although not widely known, this was one of China's most threatening challenges to the American-centered international system. Halting purchases of U.S. Treasuries meant withdrawing economic support for the global maritime hegemony, the freedom of navigation, that the United States guarantees, and it acted as the reason the United States had no choice but to change its attitude toward China.

China's rise in the twenty-first century took a different form from Japan's rise in the 1980s.

First, China actively increased its defense spending. Japan, by contrast, was passive at the time in the face of America's demand that it raise its defense budget.

Second, instead of buying American Treasuries, China unfolded large-scale global projects such as the Belt and Road Initiative aimed at expanding its hegemony. Japan had conflicts with the United States, but it never showed any overt challenge to American hegemony. China, by contrast, has pursued a strategy of expansion that is economically and militarily independent and outwardly aggressive. From America's standpoint, defense spending can be seen as a game of widening the gap with a rival, and China's rise is doubling America's burden.

The point at which China's rise came to be perceived as a grave threat to the world order was the COVID-19 pandemic. Regarding the origins of the pandemic, China neither permitted an investigation nor offered an apology, and it carried out trade retaliation against Australia for demanding an investigation. This episode became the justification for the United States to pursue an even harder line toward China, and it left a deep fissure in U.S.-China relations.

From America's standpoint, China's conduct is regarded not merely as that of an economic competitor but as a challenge to the values of free trade and democracy. Accordingly, the United States is strengthening its strategy of containing China through security cooperation frameworks such as the Quad and AUKUS.

The ‘Triffin Dilemma’ made real

The United States still maintains the standing of the dollar as the reserve currency, yet it continues to accumulate trade deficits and fiscal deficits. The dollar remains the most trusted currency in the world, but within the United States, economic inequality, the decline of manufacturing, and the crisis of the middle class have all deepened.

This situation corresponds exactly to the ‘Triffin Dilemma.’ As the reserve-currency nation, the United States must supply dollars to the world economy, and in that process it has no choice but to accept trade deficits. As a result, the domestic burden on the American economy has grown.

Since the 1970s the decline of American manufacturing has become ever more pronounced, and as many factories moved abroad, the Rust Belt regions of the American Midwest fell rapidly into decay. This place, once the center of American manufacturing, now suffers severe problems of unemployment and poverty, crime, and drug abuse. The place where J. D. Vance grew up was one of these decayed regions. His book 《Hillbilly Elegy》 vividly depicts the collapse of such communities and the personal and social suffering it caused.

Against this background, the slogans of ‘America First’ and ‘protecting the middle class’ that Trump put forward had a powerful appeal for the American middle class, and especially for the white workers of the Rust Belt. In the 2016 presidential election Trump was able to win with the strong support of the voters of this region. He criticized trade imbalances and unfair trade with China, Germany, Japan, and others, and promised the revival of American manufacturing and the protection of middle-class jobs. This message, called Trumpism, is ultimately a phenomenon reflecting the economic and political conflict within American society over the burden of maintaining the international system.

J. D. Vance is a Bitcoin advocate Trump's choice of J. D. Vance as his running mate was not a simple political gesture. J. D. Vance is the symbolic figure of the ‘forgotten America’ that Trump seeks to represent. He is someone who grew up in a collapsed manufacturing center of the American Midwest, and the social and economic background he experienced coincides with Trump's base of support. On the basis of his own experience, J. D. Vance has spoken for the suffering of the American middle class, and this has served as the political link between him and Trump.

Moreover, J. D. Vance is also well known as a Bitcoin advocate. Bitcoin is a challenge to the existing financial system, and it contains within it the ideals of resistance to vested interests and of decentralization. This philosophy of Bitcoin dovetails with the antipathy toward the existing elite that Trump espouses, but seen geopolitically it is closer to a desperate expedient on America's part.

That Trump has put Bitcoin forward as an election strategy can be interpreted not as mere political rhetoric but as an intention to redefine the new financial order and America's economic standing. The United States faces a dilemma: it compels the use of the dollar in international trade while at the same time trying not to bear the reserve-currency nation's burden of a trade deficit. If demand for the dollar declines and a hole opens in international liquidity, another currency such as the yuan or the yen could fill that place. But because the United States does not want such a situation, filling the vacuum created by the dollar's retreat with an asset such as gold or Bitcoin may be the better choice.

Trump announced a strategy of compelling the use of the dollar in international trade, warning forcefully that he would impose tariffs if the dollar were not used in trade between third countries. At a campaign rally held in Wisconsin on September 8, 2024, he announced that he would impose 100 percent tariffs on countries that seek to reduce the use of the dollar in international trade. Trump stressed the importance of maintaining the U.S. dollar's status as the global reserve currency. This remark is read as a warning against the recent movement, among China and Russia and even Saudi Arabia, to seek alternatives to dollar settlement.

This remark may appear to contradict the policy direction of a Trump administration that is lukewarm about maintaining reserve-currency status, but it in fact allows us a glimpse of America's double-mindedness. As the reserve-currency nation, the United States wants to maintain demand for the dollar so as to secure autonomy in bond issuance and interest-rate policy, while at the same time not wanting to bear the burden of a trade deficit. The dilemma that arises here is that if America's trade deficit shrinks and the supply of dollars fails to keep up with the demand for international liquidity, a hole opens in international liquidity, and the yuan or the yen fills the gap. This can lead to a weakening of the dollar's hegemony.

In such a situation the United States may judge that it is better for the vacuum created by the dollar's retreat to be filled by an asset such as gold or Bitcoin rather than by another currency such as the yuan or the yen. But a great deal of gold has flowed abroad over a long period, and gathering it back would cost enormous sums. There are also many economic and political constraints in the process of collecting gold, so it is not easy in practice.

What, then, about Bitcoin? Unlike gold, if only an appropriate policy environment is prepared, the United States can naturally establish itself at the center of the Bitcoin market without spending much. This may be the reason Trump supports cryptocurrency and has declared that he will make America the central nation of Bitcoin. It resembles the way in which, after the First World War, the world's gold flowed into an America that had kept its distance from the war and was enjoying prosperity, becoming the nourishment that later allowed the dollar to establish itself as the reserve currency.

Bitcoin, a better choice than gold

Bitcoin possesses a number of properties superior to gold, beyond simply being a digital asset. Because gold is a physical asset, it takes time to move in bulk to the other side of the earth, and this becomes an important constraint in financial transactions. Bitcoin and gold are likely to be used less as payment in themselves than as collateral assets in ultra-short-term lending among financial institutions, states, and large corporations. But gold's physical form cannot be moved. Another institution holds the physical metal while only an electronic certificate moves. This means that if an American company uses gold as collateral, it becomes a risk factor that can be affected by another country's financial sanctions or boycott.

In fact, the United States currently applies the secondary boycott (sanctions against every country that trades with a sanctioned state, in order to prevent third countries from helping it evade sanctions) forcefully to dollar transactions. Likewise, if gold is used as collateral, Russia or China could sanction American banks or companies by freezing the release of gold held in their own custody. Because the gold does not move physically and only the certificate moves, if some government imposes a secondary boycott on an American company, that company can find itself unable to receive the gold.

Bitcoin, by contrast, is free of such problems. Because Bitcoin is a digital asset, it can be sent in real time directly to the other side of the earth. There is no need to store it physically, and no need to move a certificate of title. This goes beyond mere convenience in financial transactions. From America's standpoint, Bitcoin is not swayed by another country's financial blockade, and it can be a way for American banks and companies to escape external pressure. Through it, American banks and companies can continue to maintain independent and free financial activity.

In conclusion, Bitcoin, unlike gold, is free of physical constraints, and through this it is a powerful asset capable of reducing geopolitical risk. If something is needed to fill the dollar's void in international liquidity, then Bitcoin, which even the United States cannot perfectly control but which other countries can control still less, may be the next-best option.

Bitcoin as a new financial weapon

That Trump supports Bitcoin and has declared that the United States will become the center of Bitcoin mining appears to rest on this complex strategic judgment. This can be interpreted not as simply supporting cryptocurrency, but as following a design that looks ahead to a restructuring of the future financial order and seeks to ensure that, even as such a transformation proceeds, the United States continues to hold the initiative.

Trump's cryptocurrency vision reflects a new financial strategy aimed at sustaining America's initiative in the international economy while maintaining confidence in the dollar. Korea's intellectuals, politicians, and bureaucrats, and the headquarters of its large corporations as well, urgently need to make the effort to understand in depth the relationship between Bitcoin and geopolitics.⊙