New world order is coming with Cryptocurrencies, Gold and BRICS

More and more are sounding the alarm about the exploding US national debt, now approaching $35 trillion, or 120% of GDP. Interest payments have become the biggest burden on the national budget, followed by defense spending and transfer payments.

In early June, former US House Speaker Paul Ryan proposed that the US government accept stablecoins, asset-backed cryptocurrencies, as payment for US bonds. Ryan argued that the measure would create an “immediate, sustained increase in demand for US debt, which would reduce the risk of any failed auctions and potential financial and economic crisis.”

Ryan’s proposal can be seen as an indication of the seriousness with which the US debt problem is concerned. Cryptos were seen as anti-fiat currencies. They are privately issued digital currencies that can be used under a regime around the world.

Bitcoin, the first cryptocurrency, was meant to be a platform for a new financial system that could start with a “clean slate”.

Back in 2024, crypto supporters in the US are calling for asset-backed cryptocurrencies (stablecoins) to be regulated so they can be used to buy US bonds and pay taxes. Cryptos are therefore called upon to contribute to the rescue of the flawed financial system or to replace it.

Two weeks after Ryan made his proposal, US Congressman Matt Gaetz introduced a bill that would allow Americans to pay their income tax in Bitcoin. Gaetz argued that this radical move will promote innovation, increase efficiency and provide greater flexibility for American citizens.

The question is whether a fiat currency can coexist with private currencies. The dollar has lost 90% of its value in the last 50 years and continues to lose purchasing power at a rate of about 10% per year. Cryptos vary widely in value, but almost all are priced in dollars. This means they are not immune to a possible devaluation of the dollar.

Bitcoin Pizza Day

On October 31, 2008, a developer under the pseudonym Satoshi Nakamoto published a white paper announcing the first peer-to-peer cryptocurrency, Bitcoin. Users could “mine” Bitcoins by solving complex math problems and be rewarded with the new Bitcoins.

Nakamoto pointed out that the reason for the creation of the cryptocurrency was to save Wall Street and the corrupt financial system in 2008, for the sake of a small elite. Bitcoin would be the people’s money, beyond the control of governments.

It would allow citizens to make payments and almost for free. Only 21 million Bitcoins could be mined, making the digital currency immune to inflation caused by overprinting money, a typical feature of fiat currencies.

In 2010, Bitcoin recorded its first commercial transaction. A Bitcoin miner named Laszlo Hanyecz offered 10,000 BTC to anyone who delivered two pizzas to his home in Florida. British developer Jeremy Sturdivant accepted the offer. Two pizzas were delivered to Hanyecz’s home in exchange for $25, and Hanyecz transferred 10,000 bitcoins to Studivant’s Bitcoin wallet. The transaction valued Bitcoin at $0.0041.

The first Bitcoin transaction, remembered as Bitcoin Pizza Day, sparked interest in the digital currency. Entrepreneurs invested in bitcoin mining farms and opened exchanges to help people buy and sell cryptocurrencies. In just 15 years, the price of Bitcoin went from almost zero in 2009 to an all-time high of $75,830 in early 2024. However, Bitcoin has failed to make much progress as a payment currency. Only a small fraction of Bitcoin transactions are used for retail. The rest is about crypto transactions.

Crypto entrepreneurs have launched various crypto variants. Among them are stablecoins. Some stablecoins are backed by assets such as real estate, corporate debt, and even other cryptocurrencies, while others are backed by fiat currencies held in bank accounts. A crypto called DigixDAO is backed by 1 gram of gold stored in a vault, providing “a stable value backed by physical gold.”

Of course, the connection of crypto with gold is ironic. The problems in the financial system, ostensibly the trigger for Bitcoin’s growth, were largely caused by the US government’s decision in 1971 to decouple the dollar from the gold standard.

The petrodollar

After World War II, the dollar became the world’s reserve currency. Under the Bretton Woods Agreement of 1944, the dollar was pegged to gold at a fixed price of $35 per ounce.

The British pound, French franc and other countries’ currencies were pegged to the dollar, and therefore indirectly to gold. The use of gold reserves as a measure imposes fiscal discipline on countries by limiting the amount of money that can be issued.

In the 1960s, several European countries were concerned that the US government had overstretched itself financially, due to the war in Vietnam and the introduction of social programs (the war on poverty). European economists suspected that the US was printing more dollars than it could back with gold. The French government made its concerns known in dramatic fashion. He sent a warship to New York loaded with dollars and demanded gold in exchange.

Several other countries followed suit, albeit without warships, and gradually depleted US gold reserves. At the end of World War II, the US had 21 metric tons of gold. In 1971 only 8,133 tons remained.

Worried about losing its remaining reserves, the US government announced it would temporarily close the so-called gold window, thereby breaking the Bretton Woods agreement. To maintain global demand for dollars, the US in 1974 convinced Saudi Arabia to sell oil exclusively in dollars in exchange for military protection.

The agreement required all oil-importing nations to hold dollar reserves, which formalized the growing demand for dollars. The so-called petrodollar cemented the dollar’s role as the world’s reserve currency. It should be noted that the oil trade represents 7% of the world economy, but it is necessary for the remaining 93% of the economy.

Explosive debt

No longer constrained by the limits imposed by the gold standard, the US government rapidly increased its debt. In 1971, US debt was $400 billion, in 2024 it will reach $34 trillion, or 120% of GDP.

To finance its deficits, the US government issues interest-bearing bonds. Backed by the US government, bonds have been viewed as a risk-free investment. The main buyers were private investors, foreign governments, pension funds and insurance companies.

But history repeats itself. In the late 1960s, France was concerned about US gold reserves. Today, China is worried about US Treasuries. As China became the factory of the world, it developed a huge trade surplus with the US, reaching $1 billion a day net.

China has used some of its dollar reserves to buy US bonds and become the world’s biggest creditor to the US, rivaled only by Japan. However, then came the global financial crisis of 2008 and the infamous Wall Street bailout.

China concluded that the US had no intention of reining in spending or reforming its financial or political system. Throughout the 2010s, China gradually reduced its purchases of US debt. Moreover, it began to lay the foundations for an alternative economic architecture.


In 2021, China, Hong Kong, Thailand and the United Arab Emirates announced that they were developing mBridge, a digital alternative to SWIFT (Society for Global Interbank Financial Telecommunication). Specifically, mBridge is based on a variant of blockchain, the technology used in most cryptocurrencies.

mBridge has been built for Central Bank digital currencies and will be a potential model for a financial settlement system for the BRICS countries. The Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has tested its own CBDC bridge that will connect to mBridge .

The BRICS are also developing a single currency unit that could be partly backed by gold, oil and other commodities. A currency pegged to gold or oil would be a very big challenge to the dollar.

Gold and oil seem to be strange friends, but they have maintained a parity for over a century. Their values ​​move within a very narrow bandwidth. In 1971, when the US closed the gold window, an ounce of gold sold for $35 – reaching $2,450 in early 2024. In 1971, a barrel of oil was $3.60. In recent years it has traded between 80 and 100 dollars per barrel.

Measured against gold and oil, the dollar has lost about 90% of its value over the past 50 years. If the BRICS launch a gold-pegged currency, it could affect the price of everything from oil and gold to copper, aluminum and the strategically important rare earths used in green technology.

The ever-growing BRICS organization will not only control the lion’s share of global commodities, but will also be the leading producer of many industrial and consumer goods. The total economic output of the current BRICS members has already surpassed that of the G7.

In June this year, Saudi Arabia announced that it would join both BRICS and mBridge. The Saudis were already selling oil in non-dollar denominations, but the announcement made it clear that the Kingdom’s oil commitment had ended. The Saudis were wrong and should have chosen Bitcoin.

Let’s imagine a world where 50,000 banks use bitcoin with P2P settlements with each other. Ask the Bank of Australia, the Bank of Austria or the Bank of China if they wouldn’t want to own an asset that doesn’t lose 7 to 10% of its value a year. Ask them if they wouldn’t like to be able to transact with any other bank in the world, peer-to-peer. It’s an improvement over the existing system.”

Why would Saudi Arabia, China, and the other BRICS countries sell their commodities or industrial products through cryptocurrency that will be denominated in dollars while moving away from the dollar system?

Crypto or gold?

The US debt problem has been exacerbated by extreme forms of financial engineering. The introduction of cryptocurrencies into the financial system will help take a big step further. Cryptos can be used anonymously and cross-border, which makes them ideal for tax evasion.

They could turn the US into a “new Switzerland”. The US considers it a positive strategy to make itself a destination for tax evaders, criminals, etc. The purpose is not to condemn tax crime and violent criminal activities, but to seek the American banker’s profit from these operations.

The US has three options, and none of them are painless:

  • They must reduce defense spending and entitlements by at least 30%,
  • To go bankrupt in part or
  • To inflate their debt.

The first two options are politically possible only in a national emergency, the latter will cause years of extremely high inflation. The US should reindustrialize to reduce its dependence on foreign manufacturers for even the most basic goods.

The next US president should formulate an industrial policy, or better yet, a national plan to redefine society. In the short term, there is no reason for optimism. Former US President Donald Trump has given his blessing to cryptos.

His re-election campaign is accepting cryptocurrency donations and has vowed to punish countries that stop using the dollar. That doesn’t sound like a plan. Reserve coins are in progress. They are remnants of the colonial era.

About the author

The Liberal Globe is an independent online magazine that provides carefully selected varieties of stories. Our authoritative insight opinions, analyses, researches are reflected in the sections which are both thematic and geographical. We do not attach ourselves to any political party. Our political agenda is liberal in the classical sense. We continue to advocate bold policies in favour of individual freedoms, even if that means we must oppose the will and the majority view, even if these positions that we express may be unpleasant and unbearable for the majority.

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