Last week we discussed what we consider to be a “tech takeover” of the US Presidency, epitomised by Elon Musk’s financially substantial, steadfast support for president-elect Donald Trump, and by Peter Thiel’s support for JD Vance. In a further re-affirmation of this tech takeover, JD Vance said that if Europe regulates Elon Musk’s platforms, the US will drop their support to NATO. This is only the tip of the iceberg of the tech sector’s capture of the political, economic and social institutions in several countries around the world, among which the US is clearly the jewel in the crown.
A key component of this takeover process will be the upcoming push by the US administration for the widespread adoption of Bitcoins in the US, with the possibility of purchasing them as strategic assets of the US Federal Reserve. As mentioned last week, the current President of the SEC, Gary Gensler, who has tried to regulate the initial crypto wild west, will for this reason resign on 20 January 2025, the day of Trump’s second inauguration.
This process will not be mitigated even by the adoption, anytime soon, of a central bank digital currency by the US administration. As we discussed in detail in the recent book “Smart Money”, on 18 January 2024 Donald Trump explicitly said, “As your president, I will never allow the creation of a central bank digital currency.”
If anything, the US will continue pushing for the adoption of the particular type of crypto-asset called “stablecoin,” in which they have a competitive advantage given that most of the current stablecoins are denominated in USD. Even the, establishment-linked old guard of the Republican party, like the former speaker of the House of Representatives Paul Ryan, wrote in a recent article that “Stablecoins Can Defend the Dollar’s Global Status.”
In the emerging pyramid of digital assets, it seems like the Europeans and the Chinese want to pursue a state-driven approach of promoting the issuance of digital currencies by central banks as agents of the government and the state, while the US wants to pursue its traditional market-oriented approach of favouring the diffusion of private-sector currencies such as crypto-assets and stablecoins.
This will become particularly evident when a new type of stablecoins, namely those issued by corporations (Amazon, Google, etc.), emerges in coming years and replaces those currently in existence. By that point it will have become evident that large multinational corporations can issue currencies that are more stable and reliable than those issued by some weak sovereign states. But even in the most powerful of countries, the US, “corporate coins” will pose a challenge to the official currency, the USD.
When coupled with the upcoming massive de-regulation, the promised axe on public services promoted by the Musk-led DOGE, this process will contribute to undermining the state as the entity regulating people. Thus “tech” could eventually finish the job of undermining states, a process that was initiated by the financial industry during the 1990s and culminated with the devastating Global Financial Crisis of 2008-2009. Incidentally, both Big Tech and Big Finance were US-dominated industries.
