Crypto is the new craze—perhaps as goofy as frisbee. At least frisbee involved physical activity, a bit of exercise, and the joy of playing with friends. But what does crypto offer in comparison?
Recently, the Bitcoin community erupted in celebration after the US issued an executive order on crypto strategic reserve formation. The order clearly differentiates Bitcoin from other digital assets. It declares that that this particular virtual currency may be further accumulated, while other cryptocurrencies will either be maintained or sold—but certainly not added to.
And just like that, the Bitcoin crowd is ecstatic. The US, in its grand display of financial virtue, has anointed it as the digital gold of the 21st century, while dismissing the rest of the crypto ecosystem as mere technological curiosities. The community now expects the rest of the world to fall in line, as though the US financial system is the ultimate standard of prudence and morality.
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The blind spot in Bitcoin evangelism
What’s truly astonishing is how easily this narrative is being accepted—without question. Is no one pausing to ask how this move could upend fundamental foreign exchange rules and regulatory safeguards? For all their technological prowess, many crypto evangelists seem either unaware—or indifferent—to issues like balance of payments, illicit financial flows, and systemic risks.
Let’s be clear: regulation isn’t meant to restrict responsible actors. It exists to identify and filter out the bad ones. Yet, every time deregulation is floated as a virtue, one has to ask: is this just a new path for US-owned or US-influenced financial monopolies, masked as decentralisation?
Ironically, institutions that cry foul over monopolies seem comfortable creating them—provided they come with new-age branding.
The crypto community insists that because US regulators treat Bitcoin differently, the rest of the world should follow suit. But where is the independence of these regulatory institutions? Is this really about economics, or are we witnessing a geopolitical play disguised as financial strategy?
Bitcoin as the new-age soft power tool
The US has long used financial instruments as tools of influence and control. If crypto is the new USAID—a soft power mechanism disguised as financial inclusion—what’s stopping American private or government entities from flooding poorer nations with the digital currency?
Would pressuring Middle Eastern or Chinese governments into crypto accumulation make it a legitimate monetary exchange? Or would it simply be another example of geopolitical overreach dressed up as innovation?
Here lies the most questionable premise: Bitcoin as a strategic reserve asset. Advocates argue that since it is non-sovereign and beyond any single country’s control, it should serve as the reserve currency of the future. This logic holds only if we completely ignore reality.
Crypto produces no cash flows. It has no intrinsic value. Its price fluctuates wildly, often influenced more by online sentiment or celebrity tweets than economic fundamentals. Yet, the community hails the US decision as a win.
What happens if a future Trump administration decides to include other cryptos in reserves? Will that be seen as a triumph—or another reckless experiment with global consequences? Just because the US chooses to ignore financial fundamentals doesn’t mean the rest of the world should follow blindly.
India must tread carefully
India’s Reserve Bank and government have wisely been cautious. They’ve resisted the temptation to fully embrace private cryptocurrencies—and for good reason. Should we mimic a country that selectively legitimises crypto only when it aligns with its strategic interests?
If India were to begin accumulating this digital currency as a reserve asset, it could significantly affect our monetary policy, foreign exchange reserves, and financial stability. Do we really want our economy exposed to the speculative whims of global crypto whales?
More troublingly, cryptocurrencies can become conduits for illicit financial flows. Cross-border crypto transfers—often opaque and anonymous—can lead to massive capital outflows. These transfers have the potential to quietly deplete foreign exchange reserves, disrupt the balance of payments, and facilitate illicit activities such as money laundering, tax evasion, and the financing of criminal enterprises. If individuals or corporations begin moving large sums of money through crypto rather than regulated banking systems, the scale of these transactions could remain hidden until it is too late to respond.
Countries with weaker currencies are especially vulnerable. In such nations, cryptocurrencies could accelerate capital flight, destabilise exchange rates, and severely undermine financial systems. Crypto’s unchecked growth risks transforming national economies into speculative casinos—where sovereign monetary systems are subordinated to the volatility and sentiment of global digital markets. It’s a grim irony that what’s being marketed as a “safe-haven asset” could very well become a destabilising force in fragile economies.
The zombie revolution
As children, many of us collected seashells, comic flipbooks, and posters of our sports or film idols. We traded them, argued over their value, and occasionally fought when a deal went sour. Looking back decades later, it seems silly—though it felt serious at the time.
Despite the hype, Bitcoin and other cryptocurrencies remain what they were ten years ago—speculative, volatile, and fundamentally unproductive assets. The only real change is that the US has now bestowed legitimacy upon Bitcoin, while casting off the rest of the crypto universe.
When I hear the bombast of crypto enthusiasts, it feels like watching an apocalyptic zombie movie. The characters, lost in their trance, truly believe this is the revolution that will transform the world.
But the question remains: transform it for whom?
Srinath Sridharan is a strategic counsel with 25 years experience with leading corporates across diverse sectors including automobiles, e-commerce, advertising and financial services. He understands and ideates on intersection of finance, digital, contextual-finance, consumer, mobility, Urban transformation, and ESG. Actively engaged across growth policy conversations and public policy issues.