Bitcoin VI

Why is the fiat currency-led, debt-driven global financial system teetering on the edge of collapse (fiat currency is government-issued ‘money’ that has no intrinsic value and is not backed by a physical commodity)?

Answer: When confronted with crises – such as budget deficits, pandemics, wars, bank bailouts or market crashes – politicians and central banks instinctively print more fiat currency, flooding the system. This devalues money, undermines confidence in governments, central banks and fiat currencies themselves, and pushes the fragile system closer to collapse.

The current system, propped up by debt and delusion, is unravelling. Fiat currencies are in terminal decline, while gold and Bitcoin are emerging as the ultimate truth-tellers in a world built on financial lies.

A historical parallel underscores fiat currency’s vulnerability: during Japan’s invasion of China in the 1930s and 1940s, the Japanese issued ‘military yen’ to control the occupied economy. This fiat currency, backed only by military authority, was printed excessively to fund operations. When Japan withdrew after World War II, the ‘military yen’ became worthless – a stark reminder of fiat’s fragility when trust and authority vanished.

Global debt has soared past $300 trillion, inflation remains stubborn despite official reassurances, and gold – the eternal truth-teller – has breached $3,500 per ounce, reflecting deepening distrust in fiat currencies and the central banks that continue to print them.

The People’s Bank of China, Central Bank of Russia, Reserve Bank of India, Central Bank of Turkey and the National Bank of Poland, to name just the five major ones, are hoarding gold while publicly dismissing Bitcoin, a decentralised alternative they fear.

Question: Why do politicians and central banks fear Bitcoin? Answer: Bitcoin’s fixed supply of 21 million coins and its soaring hash rate – now exceeding 700 exahashes per second – pose a direct challenge to fiat currency’s centralised control. Unlike fiat, Bitcoin’s value isn’t dictated by any single authority; it’s secured by a decentralised, global network of miners and remains immune to monetary debasement.

Question: Why do politicians and bankers dread Bitcoin? Answer: Because Bitcoin’s decentralised ledger defies centralised control. And because printing money can’t dilute Bitcoin’s scarcity.

Yet, despite their fears, Bitcoin’s ascent continues unabated. From 2015 to 2025, Bitcoin has recorded a staggering compound annual growth rate (CAGR) of approximately 70 per cent. Over 80 corporate entities now hold Bitcoin in their treasuries. Nation-states – including China, Singapore, Switzerland, El Salvador, Bhutan, Russia, the UAE, Brazil, Japan, South Korea, Nigeria, Thailand, Portugal and Venezuela – are on their way to acquiring it.

The question isn’t whether fiat currencies are dying – they are – but what will replace them. Yes, gold remains a store of value, but its physical limitations – vaults, trucks, planes, customs – make it impractical for a digital age. Yes, Bitcoin, with its portability, security and absolute scarcity, is the frontrunner to redefine money.

Warning: The World Bank and the IMF may not exist in their current form for long. Politicians may cling to their printing presses, but the market is sending an unmistakable signal. The system’s reset is inevitable. Gold is revealing the truth about ‘real value’. Bitcoin’s surging hash rate is a testament to its resilience. The collapse of the current monetary system is no longer a question of if, but when. Those who prepare for a decentralised future won’t just survive – they will thrive.

The writer is a columnist based in Islamabad. He tweets/posts @saleemfarrukh and can be reached at: farrukh15@hotmail.com