We’re One Big Human Family, And We ‘Deserve’ A World Cryptocurrency

The suggestion that Bitcoin or some other kind of digital asset might one day supplant the U.S. dollar as the global reserve currency isn’t new, but most people believe that we’re still a long way from it happening. 

However, there are reasons to believe that such a transition will happen sooner than we think, and certainly within our lifetimes, for it’s fast becoming a necessity in a “borderless” world where the poorest people are becoming increasingly marginalized.

In a recent podcast, Farzam Ehsani, the CEO of VALR Exchange, makes a compelling argument about why crypto’s emergence as a global reserve currency appears to be inevitable. He doesn’t know when it will happen, but he insists that it certainly will. 

“The world doesn’t just need a world currency, it deserves a world currency,” Ehsani said. “Ultimately we’re heading towards that, but there’s going to be quite a transition to make it happen.” 

My most extensive interview to date, while in Hong Kong last month. https://t.co/MmhIss5uKN

— Farzam Ehsani (@farzamehsani) October 9, 2024

U.S. Dollar Under Threat

There are signs to suggest such a transition is already underway. We live in a world that’s marked by global economic volatility and political uncertainty, with nations like the U.S., China, India, and Russia all vying for hegemony. With the rise of competing geopolitical blocs like BRICS emerging to rival the West, the idea of a new world order has gained a lot of traction. And if it continues to gain momentum, it’s sure to have huge repercussions on the existing global financial system. 

Traditionally, the global reserve currency has always been associated with the rise and fall of nations. While the U.S. dollar has long held this status, it wasn’t always so. 

“If you look before that, we had different reserve currencies,” Ehsani pointed out .”For a long time, we had the pound, and before that, we had currencies from Spain and the Netherlands.” 

The reign of the U.S. dollar is increasingly being challenged by a combination of factors, including the emergence of crypto itself, growing income equality, political polarization, and geopolitical developments that have seen the U.S. attempt to weaponize the dollar. Recent actions by the U.S. include seizing the dollar reserves of Afghanistan after the Taliban assumed power, and Russia being cut off from the SWIFT payment system following its invasion of Ukraine. Those actions have forced nations to look for alternatives, with the BRICS countries already making efforts to de-dollarize and create a common currency for trade. 

At the same time, Bitcoin is growing its status as a strategic asset. At a recent conference in Nashville, former President Donald Trump told attendees of his plans to create a “strategic national Bitcoin reserve” if he’s reelected. He also advocated for the U.S. to start mining Bitcoin on an industrial scale, saying that “if we don’t do it, China will.” 

The U.S. isn’t alone in wanting to create a strategic reserve based on the world’s most powerful cryptocurrency. El Salvador has already accumulated millions of dollars in Bitcoin, which is a key part of its national reserve. 

Crypto: A Logical Successor

Ehsani believes that crypto is the natural successor to the U.S. dollar, and to bolster that viewpoint, he points out that the global reserve currency hasn’t always been fiat. For a long time, commodities like gold and silver were the key reserves.

“It wasn’t long ago that we didn’t even have national currencies in most parts of the world,” he said. “In the U.S., South Africa, and other places, banks would issue their own local currency, which was essentially just receipts of the gold deposited in their vaults.” 

The way the world is evolving and becoming more globalized means it no longer makes sense to have a “national” currency as the world’s strategic reserve, Ehsani argued. The rise of the internet and the age of air travel has challenged the very notion of the nation-state, he said. The notion of where we can go as human beings and what our rights are, is very different from what it was historically, when most people spent their entire lives in the places they were born. He explained that we’re now living in a “borderless society” where most people are free to travel and live anywhere they wish. 

“We’re living in a global village so it doesn’t make any sense in the future to have a world currency that’s under the power of a particular subset of humanity in a particular country,” Ehsani stressed. “We’re moving into this world where we will eventually have a single currency for the world, for humanity as a whole.”

So if the world’s next global reserve currency isn’t going to be fiat, then cryptocurrency, as an alternative form of finance that has already proven it can work on a global scale, would appear to be the most logical option as to which cryptocurrency, that remains to be seen. While Bitcoin is the favorite for now, it may be many more years before the U.S. dollar loses its crown, and the successor may not have even been invented yet, Ehsani said. 

Inequality And Injustice Drive Change

One of the major reasons to believe in the rise of crypto as the world’s foremost financial asset is the level of injustice with the existing monetary system. A good example of this is the remittances corridor. Remittances are essential to some of the world’s poorest economies, with millions of families around the world relying on money sent home from family members who have gone to work in richer countries, yet these people are heavily taxed. 

Eshani highlighted the Zimbabwean migrant workers living in South Africa as an example of this. Although Zimbabwe is really only just next door, there’s a hugely complex remittance corridor that extracts much of the value from what these people earn and send home. The standard fee can be as high as 10% in many cases, he said. 

That’s just one example of how intermediaries are making a fortune off the backs of some of the world’s poorest people. Those people are also the ones who suffer the most from economic turmoil. For instance, inflation always hits those with low incomes much harder than it does anyone else. While the wealthy and the middle class might end up paying more for their gourmet meals and their groceries, they can still pay for them. But for the world’s poorest, inflation might mean they can no longer afford even the basics.

“There’s a lot of poverty in the world,” Ehsani said, adding that the existing financial system has been unable to solve these challenges. 

The injustice of the global financial system has already sparked much broader acceptance of crypto, especially in developing economies, with countries like India, Nigeria, Argentina, Brazil, Pakistan, Kenya, Thailand, Indonesia, and Vietnam consistently ranking among the highest in the world in terms of crypto ownership. As awareness grows, so will adoption, and ultimately there is not much that can prevent the rise of an alternative financial ecosystem that can address some of today’s inequalities. 

Precedents For Change

Ehsani believes the rise of crypto as a world currency is not just some optimistic dream of world peace and world unity, but an inevitable consequence of the unjust, yet globalized world we live in today. Moreover, he believes there are several precedents in human history to the kind of Earth-shattering changes that the advent of a crypto-based global reserve would bring about. 

The very fact he is being interviewed by a woman would have been unthinkable 200 years ago, when the role of women around the world was almost universally oppressed, he said. More recently, there’s the evolution of the social and political system in South Africa, which was previously an apartheid nation completely segregated by race, right up until 1994. 

“Now, of course, that’s totally unacceptable,” Ehsani said. “South Africa is not segregated by race anymore, and if we look at it from a legal perspective and a social perspective, it’s clear we have made a lot of progress.” 

Looking at this progress, Ehsani believes it simply doesn’t make sense anymore for humanity as a whole to be so divided along the lines of race or even nation-states. And he thinks the situation will certainly change as the world becomes more and more globalized over time. 

“These things don’t make sense to me. We are one human family,” he said. “Some have a difficult time perceiving that when they’re living in a particular society in a particular paradigm, but when paradigm shifts come, things can change very, very quickly.