Money and currency is all about power and politics

It’s been really interesting watching the moves of Donald Trump to Make America Great Again by doubling down on the dollar being the reserve currency of the world forever more through the GENIUS Act. Well, that’s my take anyway. Add on to this that the Trump family made billions by launching World Liberty Financial, their very own crypto token:

• Trump fortune balloons by billions after family firm’s crypto token starts trading
• ‘Roadmap for corruption’: Trump dive into cryptocurrency raises ethics alarm

… and you can see how things are moving and working. The bottom-line is that money is power and power is politics. You don’t see many poor politicians, do you?

With that in mind, you can now see why the whole debate about stablecoins, CBDCs, cryptocurrencies and the sea change we are going through by tokenization is so turbulent and turbo-charged. A change in the use of money changes power and politics and, more concerning, a change in who controls what and how. This has been the core debate over the rise of crypto. It’s the Libertarians vs the Statists. It’s all power and politics.

In fact, when you think that we just invented money to enforce power, then you realise how the world works better.

Money was invented 10,000 years ago in Mesopotamia, as I’ve blogged a few times.

The core of monetary policy was to give a reward – sex – in return for allegiance to the leader, the Emperor, the King, the State. But then the whole essence of money was a pure invention of the leader, the Emperor, the King, the State. If the dollar disappeared tomorrow and was replaced by the euro, then that’s what you would use. If the euro disappeared tomorrow and was replaced by the ruble, that's what you would use. If the ruble disappeared tomorrow and was replaced by the renminbi, that’s what you would use.

Money and currency is purely a representation of power and politics.

We accepted very quickly that the euro replaced French francs, Deutsche marks, Italian lira and Spanish pesetas but, what this shows, is that money is purely a belief. A belief that this currency has value because those who are in power tell us that it has value … and those in power are polticians.

Money and currency is all about power and politics.

It seems obvious when you say it. The only thing is that the network is now challenging the nature of such power and politics. The more we talk about decentralisation, democratisation and tokenisation, the more the people are taking power from the politicians, the State and the government, and placing it in the hands of the people.

This is why the times we are living through are so transformational although there is a caveat. Those in power and politics will not give in so easily and, like any biological system, those in power and politics are regrouping, reorganizing and re-energizing. That’s what CBDCs and stablecoins are all about.

The end-game is that the currencies that will win are those we believe in most because those behind those currencies are the powers we believe the most.

#truth

A final thought is that the net:net is that politics is that weird thing which, like my other references, date back to Roman times where poly meaning many, and tics meaning blood-sucking parasites, still exists.