Six Figures and a Seat at the Table: How Crypto Entered World Politics

Bitcoin crossed $100,000 for the first time this week, a number that would have sounded absurd to most finance ministers a decade ago. The immediate driver is American politics: markets are pricing in a friendlier regulatory climate after an election in which the winning candidate campaigned openly for the crypto vote. But the milestone also caps a longer transformation. Over the past few years digital assets have moved from a niche technology debate into the vocabulary of sanctions policy, monetary sovereignty, development finance and great-power competition.

That shift is easy to miss if one looks only at prices. It becomes clearer when one looks at who is now talking about crypto: presidents, central bankers, finance ministries, sanctions officials and multilateral lenders.

From regulatory nuisance to campaign issue

For most of the 2010s, governments treated cryptocurrencies as a consumer protection problem or a vehicle for crime. The policy debate was about money laundering, fraud and investor losses, and the collapse of the FTX exchange in November 2022 seemed to confirm that view. In the United States, the Securities and Exchange Commission pursued a series of enforcement actions against major industry players.

The turning point came in stages. In January 2024 the SEC approved the first spot bitcoin exchange-traded funds, giving mainstream investors a regulated route into the asset. Those funds attracted large inflows within months. Then, during the 2024 campaign, Donald Trump courted the industry directly, promising to end what his supporters called regulation by enforcement and floating the idea of a national bitcoin reserve. Industry-funded political action committees spent heavily in congressional races, helping elect a cohort of lawmakers seen as sympathetic.

The result is that crypto is now a partisan and electoral issue in the world's largest economy, not just a regulatory one. That alone changes its geopolitical weight, because what Washington decides about digital assets shapes rules and markets everywhere.

Sanctions and the search for alternatives

The second driver of crypto's political rise is sanctions. After Russia's full-scale invasion of Ukraine in 2022, Western governments froze a large portion of Russia's central bank reserves and cut major Russian banks off from SWIFT messaging. Many governments outside the West drew a lesson: holdings in dollars and euros can be immobilized for political reasons.

Crypto features in the response in two ways. Some sanctioned states and actors have used digital assets to move value outside the traditional banking system, and Russia passed legislation in 2024 permitting the use of crypto in some cross-border settlements. At the same time, blockchain transparency has made crypto a useful tool for investigators, and Western authorities have sanctioned exchanges, mixers and wallet addresses linked to illicit finance. Crypto is therefore both a potential escape route from sanctions and a new front in enforcing them.

Crypto was built to be stateless. Its biggest recent gains have come from states taking it seriously.

Small states, big experiments

El Salvador became the first country to make bitcoin legal tender in 2021, a move that brought international attention and friction with the International Monetary Fund. Adoption in daily commerce has been limited by most accounts, and negotiations with the IMF have repeatedly touched on the bitcoin policy. The Central African Republic briefly followed a similar path before reversing course. These experiments matter less for their economic results than for what they signal: that a sovereign can use crypto as a statement of independence from traditional financial gatekeepers.

Larger emerging economies have taken more cautious routes. Several have focused on central bank digital currencies or fast domestic payment systems rather than private cryptocurrencies. India, Brazil and others have built public payment rails that reduce the appeal of crypto for everyday transactions while keeping monetary control firmly in state hands.

The BRICS question

Discussion of alternatives to dollar-based payments has been a recurring theme at BRICS summits, including the October 2024 meeting in Kazan. Proposals have included cross-border payment platforms and greater use of local currencies. Speculation about a BRICS currency or a crypto-based settlement system often runs well ahead of reality; member states have divergent interests, and no concrete plan for a shared currency has been agreed. Still, the conversation shows how digital payment technology has become part of the broader debate about the dollar's dominance.

Stablecoins: the dollar's unlikely ally

Perhaps the most important and least discussed development is the growth of dollar-backed stablecoins. Tokens pegged to the US dollar have become the main medium of exchange inside crypto markets and a popular store of value for individuals in countries with high inflation or capital controls. Their issuers hold large amounts of US Treasury bills to back them.

This creates an irony. A technology often marketed as an alternative to the dollar system has, in practice, extended the dollar's reach into places where banks cannot easily go. The incoming US administration and many in Congress appear to see stablecoin legislation as a way to reinforce that effect. Europe, meanwhile, is implementing its Markets in Crypto-Assets regulation, whose stablecoin rules already apply and whose full regime takes effect at the end of this month.

What the milestone means

A six-figure bitcoin price is a symbol, and symbols matter in politics. It will strengthen the industry's hand in Washington and encourage other governments to reconsider their positions. But the deeper change is structural. Crypto now sits at the intersection of three political questions that will define the next few years: who controls money, who can be cut off from it, and whose rules govern the digital financial system.

Readers should treat the price itself with caution. Crypto markets have a long history of sharp reversals, and nothing here is investment advice. The political trend, however, looks more durable than any single rally.