Sanctions Show Fiat Is Finished, And Why Stablecoins Will Quadruple

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Global sanctions show the fragility of Fiat

If anyone was in any doubt that Fiat currency was on its way out, this week should clear those doubts away. As Bitcoin (BITCOMP) enjoys a 15% increase, and smaller blockchains with big growth potential in an alternative financial system like Terra, Near and Fantom record gains of 25 to 70%, the Russian ruble is posting record daily losses. 

Indeed, BTC volumes on Russian exchanges have jumped to all time highs as Russian citizens are fleeing the crumbling ruble thanks to Putin invading Ukraine. This has, of course, raised concerns among global regulators that Putin could use digital assets as a way to avoid sanctions, however these have been roundly and rightly dismissed by the US Blockchain Association. As the latter has observed, such assumptions fundamentally misunderstand 'how sanctions work, how crypto markets work, and how Putin is actually trying to mitigate sanctions.

Of course, global regulators like the ECB appear to be using this as an opportunity to regulate cryptocurrency harder and faster, however it’s use case as a store of wealth in times of crisis is being proven quite roundly at the moment. Not least by Bitcoin's correlation with gold.

We are at the dawn of a new financial era in which citizens will be able to take actions to preserve and grow their wealth in a system that is not influenced by the military or monetary ambitions of its leaders. This time of crisis could prove a pivotal, if not costly, turning point for financial freedom.

Some thoughts on stablecoins... 

• Explosion in stable coins helped by a rush to safety, but the main drivers are totally structural
• Circulating supply has increased from $40 billion in February last year, to $180 billion this year
• This is a long-term trend that underlines the waning attraction of Fiat currency, and the huge attraction of stablecoins
• The only thing stopping stablecoins from growing exponentially is a lack of education and fear
• We can expect the circulating supply of stable coins to quadruple again in the coming year