How does crypto influence global politics?

Cryptocurrencies are no longer just a financial trend or a technological innovation – today, they have an increasing influence on global politics. Their decentralized nature challenges traditional financial systems, reshapes international relations, and raises questions about state sovereignty, security, and individual freedom.

Regulation and the global rules of the game

Crypto has forced governments and international institutions to redefine their approach to money and financial flows.

• The European Union has adopted the MiCA regulation (Markets in Crypto-Assets), aiming to create a unified and regulated market for all member states and provide greater legal certainty for investors.
• The United States still lacks a single comprehensive law, relying instead on a mix of rules from different regulators such as the SEC and the CFTC. This creates uncertainty but also leaves room for innovation.
• China, in 2021, banned cryptocurrency trading and mining, while simultaneously developing its own central bank digital currency (e-CNY) as a response to the global expansion of the digital economy.

These differing strategies show that crypto has become a geopolitical issue — not just a financial phenomenon.

Financial power and national competitiveness

The adoption of cryptocurrencies can serve as a powerful political tool. Countries that create a crypto-friendly environment for blockchain projects and startups attract investments, new businesses, and skilled talent. Examples include Switzerland, Singapore, and the United Arab Emirates, which are positioning themselves as global hubs for the crypto industry.

How Switzerland became a global hub of the crypto world

Switzerland is now synonymous with security, trust, and innovation — and these very elements have been key to its success in the world of cryptocurrencies. While many countries were still debating whether to accept crypto at all, Switzerland recognized its potential early on.

Instead of banning or restricting cryptocurrencies, it chose to regulate them wisely — clearly defining the rules so that investors and companies know what they can and cannot do. This regulatory clarity proved crucial: entrepreneurs felt confident investing, and innovators had the freedom to grow.

The result is “Crypto Valley,” the name given to the region around the city of Zug, near Zurich.

As early as the 2010s, the first blockchain companies began to gather there, attracted by:

• low taxes,
• simple business regulations,
• and a supportive government policy toward new technologies.

Today, Zug is home to hundreds of crypto and blockchain projects — from startups to globally recognized companies. Some of the industry’s most influential blockchain initiatives were born in Crypto Valley, including the Ethereum Foundation, one of the most significant organizations in the entire sector.

Beyond business advantages, Switzerland also has a strong culture of privacy and decentralization — values closely aligned with the philosophy of cryptocurrencies. Thanks to this combination of innovation, stability, and trust, the country has become a global leader in the crypto industry and a prime example of how smart policy can drive technological progress.

On the other hand, countries that take a restrictive stance risk losing both capital and innovation to more open markets. In this way, crypto has become a factor that shapes the long-term competitiveness and global influence of nations.

Crypto and international sanctions

One of the most sensitive political aspects of crypto is its role in bypassing sanctions. Since blockchain transactions don’t require banks or intermediaries, countries and organizations under sanctions sometimes use cryptocurrencies for international payments.

Examples such as Iran, Venezuela, and Russia show that crypto can be used as a tool to resist financial restrictions imposed by major powers or institutions like the U.S. and the EU. This raises new discussions about global security and the balance of power.

Venezuela – cryptocurrencies as a response to hyperinflation

Venezuela is one of the clearest examples of how cryptocurrencies can become a tool for survival in a country facing economic collapse.

Due to extreme hyperinflation and the breakdown of its national currency (the bolívar), citizens began using:

• Bitcoin and USDT (Tether) to preserve value and make everyday transactions,
• Binance P2P as the main platform for exchanging money and receiving remittances from abroad,
• and even the government attempted to launch its own cryptocurrency — Petro, allegedly backed by the country’s oil reserves, in an effort to reduce dependence on the U.S. dollar.

In short, in Venezuela, crypto became a lifeline — a way for people to protect their savings and receive support from family members living abroad.

Russia – crypto as a tool for sanction resilience

After Russia’s invasion of Ukraine in 2022, the West imposed extensive financial sanctions targeting banks, oligarchs, and state-owned companies.

In response, Russia:

• explored the use of stablecoins and a digital ruble for international trade, particularly with countries that do not support the sanctions,
• increased its focus on crypto mining and cross-border settlements through blockchain,
• and enabled experimental trade transactions in cryptocurrencies with friendly nations such as Iran and China.

In short, Russia uses crypto as a tool for maintaining foreign trade resilience and as a means to continue international commerce despite sanctions.

Iran – using crypto to bypass sanctions

For years, Iran has faced U.S. and European sanctions that limit its access to the international financial system and the U.S. dollar market.

To ease this pressure, the Iranian government:

• legalized Bitcoin mining in 2019, under the condition that mined cryptocurrencies could be used for importing goods — effectively bypassing SWIFT and international banking channels,
• issued licenses to local companies for mining and placed state oversight on energy usage for this purpose,
• and, according to reports, Iranian importers use Bitcoin and other cryptocurrencies to purchase goods from China and other countries, since traditional bank transfers are not possible.

In short, Iran uses crypto as an alternative means of international payment, particularly when sanctions have cut off access to dollars and the global banking system.

In all three cases, cryptocurrencies have proven to be a tool of economic independence — whether for evading sanctions, stabilizing currencies, or gaining access to global markets without intermediaries.

However, this practice also raises new discussions about global security, as crypto can equally serve states seeking to bypass international financial controls.

Transparency and domestic politics

Cryptocurrencies and blockchain technology influence not only international relations but also domestic politics. Many politicians and activists emphasize that blockchain can increase transparency in public finances and reduce opportunities for corruption.

Imagine national budgets or election campaign expenses recorded on a public blockchain.

This concept is increasingly entering discussions about the future of politics and public administration.

For example, every donation to an election campaign could be displayed publicly in real time — showing who donated, how much, and when. Similarly, every euro spent from the state budget could be tracked from allocation to its final recipient.

Such a system would significantly reduce the potential for corruption and manipulation, make the misuse of public funds more difficult, and strengthen citizens’ trust.

Countries like Estonia and Sweden are already experimenting with blockchain in public administration, while some organizations and NGOs have developed prototype blockchain systems for monitoring public spending and ensuring electoral transparency.

In the future, this approach could become the new standard in democratic processes — where technology serves not only financial innovation but also strengthens the relationship of trust between governments and their citizens.

Central Bank Digital Currencies (CBDCs)

As a response to the rise of cryptocurrencies, many countries are developing their own digital currencies — CBDCs (Central Bank Digital Currencies).

• China is leading the way with its e-CNY project.
• The European Union is exploring the concept of a digital euro.
• The United States is studying the possibility of a digital dollar, but cautiously, due to concerns about privacy and individual freedom.

CBDCs show that governments aim to maintain control over money and financial systems while simultaneously adopting some of the advantages demonstrated by crypto.

How elections influence the crypto market

Although cryptocurrencies are often portrayed as independent from politics and state institutions, in recent years it has become clear that political events — especially elections — have a strong impact on the market.

Political decisions and candidates’ statements can trigger sudden price movements, as investors react to expectations about future regulations and the government’s stance toward digital assets. When politicians announce crypto-friendly regulations, the market often interprets it as a sign of confidence and growth, while warnings of stricter measures can create fear and lead to mass sell-offs.

A clear example of this occurred during the 2024 U.S. presidential election. Throughout the campaign, every time candidates mentioned plans related to crypto regulation, the market reacted almost instantly. After Donald Trump’s victory, who took a pro-crypto stance, the price of Bitcoin surged sharply — breaking the $90,000 mark, and then $100,000 just a month later.

Such reactions show that cryptocurrencies have become just as sensitive to political signals as traditional financial markets. For the average investor, this means that political news can have as much impact on the value of their portfolio as technical analysis or movements on stock exchanges.

In essence, politics and crypto are no longer separate worlds — every statement, legislative proposal, or election result can shift the market’s direction within hours.

A new era of power: when politics meets crypto

What began as a technological innovation has evolved into a global political phenomenon. Cryptocurrencies are reshaping laws, international relations, and the very foundations of the financial system. Some countries see crypto as a threat to their authority, while others view it as an opportunity for growth and to strengthen their global position.

In the coming years, global politics and cryptocurrencies will become increasingly interconnected. Issues such as regulation, financial freedom, and geopolitical interests will shape a new economic and political reality.