Germany Threatens Withdrawal from Global Banking System, More Economies Seek Cryptocurrency

Bitcoin takes another step toward mainstream usage as Germany seeks a payment system independent of the United States.

Due to recent restrictions and U.S. sanctions, Iran and Turkey have been unable to use the global banking system to complete transactions to other countries – taking a severe toll on their own financial systems. In light of this, the German foreign minister proposed a payment channel independent of U.S. control, a “European Monetary Fund”.

The U.S. government currently controls the SWIFT banking system. Although based in Belgium, the U.S. authorities still have the power to apply restrictions to this system. However, several other countries are battling frustrations with this system, threatening to pull out.

In an effort to avoid SWIFT, Iran has adopted digital trading with its allies despite its earlier attempts to ban this type of trading. In Iran’s affairs with Russia, there was an agreement to utilize these decentralized systems as a way of bypassing both the U.S. dollar and the SWIFT system. If these transactions are successful, then Russia and Iran will be the first to exchange goods via cryptocurrency.

Germany isn’t the only nation with frustrations about the current global banking system. In fact, because of U.S. control of SWIFT, European businesses cannot freely pursue their commercial interests. For example, a France-based energy company, Total, recently had to cut off a partnership with an Iranian company when the United States government threatened to remove their access to the global banking system.

The proposal from German foreign minister Heiko Maas is the first time in recent history that a major economy suggested a banking system removed from U.S. control.

These steps toward alternative banking systems show great potential for Bitcoin and cryptocurrencies. If European economies continue to drop out of the current global banking system, the U.S. dollar will see a quick devaluation, causing more reliance on Bitcoin and Ethereum as a valuable asset and trading tool.

Dependence on cryptocurrencies has already seen an increase in Iran, Turkey, and Venezuela due to a quick drop in the value of national currencies. Should this trend continue, investors, businesses, merchants, individuals, and governments will begin to turn to these alternative currencies and away from the U.S. dollar.

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