Bitcoin Geopolitics - December 2024
Critical Notes & Analysis of Bitcoin Geopolitics
I hope you are having a good day and a great December. Thanks again for reading this Barracuda Briefing.
In case you missed it, here are some recent Barracuda Insights to keep you up-to-date on the geopolitics of Bitcoin:
A Bitcoin Policy for the US Dollar in the Trump 2.0 Era | 20 December 2024
Brazil’s CBDC succumbs to Trump 2.0, De-globalization | 18 November 2024
PowerChina is Bukele’s Geothermal Energy Partner | 18 October 2024
Tether invested in Argentine farmland | 17 September 2024
Policing Telegram’s Blockchain in France | 6 September 2024
Trump puts Bitcoin firms in cross-hairs of US-China trade tensions, chip war | 30 August 2024
Brazil’s BCB plans to regulate stablecoins this year | 4 July 2024
If you want to get smarter on the intersection between geopolitics and Bitcoin technology, then read this:
US & The West
The President’s Crypto Czar | President Donald Trump named tech entrepreneur David O. Sacks as the White House’s advisor on Crypto and Artificial Intelligence. Sacks is a former PayPal executive who persuaded high-profile tech venture capitalists to support the MAGA movement in the November 2024 elections. He was also a significant donor to Trump’s campaign. Sacks is likely to focus primarily on a Bitcoin and Crypto policy, which will mean liaising with Senator Cynthia Lummis and other members of congress on the BITCOIN Act, a bill that proposes Bitcoin-based central banking. Sriram Krishnan will serve as AI advisor.
Bitcoin Strategic Reserve | Trump told reporters at the New York Stock Exchange on 12 December that the US would attempt to set up a Bitcoin Strategic Reserve. The notion of a reserve invited heated debate amongst Bitcoin investors over how a SR would impact the US Dollar system.
Germany | Outgoing German Finance Minister Lindner complained to parliament that the country was ignoring the development of a Bitcoin Policy. The Finance Minister thinks that Germany should see Bitcoin as an opportunity and seize it immediately from a policy-making standpoint.
Japan | Prime Minister Shigeru Ishiba on 25 December commented on President elect Donald Trump’s Bitcoin policy, saying that it was difficult for the government to express its views on a Strategic Reserve. The comments followed a parliamentary representative’s insistence that Japan should follow the US and convert some of its central bank reserves to Bitcoin.
Ukraine Bitcoin Holdings | Holdings of Bitcoin by the Ukrainian government totaled 46,351 BTC at the end of 2024, or approximately $4.4bn USD at the current price levels. That is equivalent to around 2.5% of the country’s GDP in dollar terms.
UN Cybercrime Treaty | A controversial treaty originally proposed by Russia has been adopted by the United Nations General Assembly. The convention will set up a framework and platform for member states to cooperate on exchanging evidence, safeguarding privacy rights, and pursuing criminal acts in cyberspace. The convention aims to improve enforcement of online financial crimes, like money laundering and payments for drugs - both of which often involve transactions in crypto currencies like Tether’s digital dollar USDT.
BRICS Plus
Russia | Russia’s finance minister Anton Siluanov said on 25 December that his country was using Bitcoin for foreign trade. The Bitcoin measures are a response to Western sanctions against Russia in retaliation for the invasion of Ukraine. Russians using the Chinese yuan for international payments have also faced a crackdown in recent months.
TGR Group | OFAC sanctioned TGR Group, a crypto-based money laundering scheme used by Russian elites to bypass US sanctions. The money laundering networks involved links to Russian money launderers and organized crime elements in the Middle East and South America. The hawala-like network involved swapping cryptocurrencies for cash.
China’s Justin Sun | Chinese-born and Singapore-based founder of TRON Justin Sun invested $30 million US dollars in Donald Trump’s crypto project World Liberty Financial. TRON is a blockchain that has partnered with Tether for fast, low-cost global stablecoin payments. Sun is also at the center of a controversy involving the censorship of a Coindesk article profiling him and his business practices.
UAE in the US | UAE-backed AI firm G42 signed a contract with US Bitcoin miner Terawulf for 70MW of infrastructure to host a High-Performance Computing (HPC) data center. Terawulf is developing a hydro-powered data center facility for Bitcoin and AI-related technologies in New York state.
Ethiopia Bitcoin Mining | State-controlled utility Ethiopian Electric Power has entered into several contracts with Bitcoin miners for excess supply at its hydroelectric facilities. The firm now generates 18% of its revenues from Bitcoin mining.
Latin America
Brazil | Brazil’s Central Bank said that it would prohibit stablecoin transfers involving self-custody wallets like Metamask and Trezor. The BCB is preparing to rollout stablecoin regulations as part of a broader central bank digital currency build out next year.
El Salvador | The IMF and El Salvador’s government signed a $1.4 billion USD funding arrangement for President Nayib Bukele’s proposed reforms. A key feature of the agreement is to adjust the country’s Bitcoin policy so that private sector acceptance of Bitcoin is encouraged but not mandatory. In the public sector, Bukele agreed to unwind the Chivo wallet program.
Argentina | President Javier Milei promised a nuclear energy resurgence for the South American country. At the center of Argentina’s nuclear energy sector is the question of who will finance the build-out of the Atucha power plant’s 1.2GW fourth unit. Milei on 20 December promised that the operations and design will be carried out by Argentine Invap and the capital financing the project will be a US firm. China had previously committed to finance the plant. Bitcoin miners see nuclear technology as key for serving miners' electricity demands.
Barracuda Briefing is a monthly update on the intersection of geopolitics and Bitcoin.