Can Bitcoin threaten a country’s national security?

Although Bitcoin has facilitated rapid transformations and growth in various global economic sectors, others are skeptical that its growing mainstream adoption could pose a significant threat to national security. These claims are mainly related to recent reports that cybercriminals have infiltrated the online platforms of large companies, demanding the payment of a ransom in cryptocurrency. As a result, security agencies have expressed their concerns about this. For example, some agencies claim that attacks that use cryptocurrencies encourage criminal activity and threaten national security.

The US military says the growing adoption of bitcoin by the general public could also pose a threat to national security, as it could potentially undermine the US dollar’s position as the world’s reserve currency. Nevertheless, these allegations target all cryptocurrencies, without explicitly referring to Bitcoin. The following article explores the relationship between Bitcoin and national security.

Digital currencies and national security

An item must meet three criteria to be considered currency. It must be a store of value, a unit of account and a medium of exchange. The US currency meets all of these criteria, with purchasing power being used to measure the net value of transactions. However, fiat currencies like the USD are centralized, subject to government and central bank regulations.

Virtual currencies like Bitcoin are digital assets used to trade with validated transactional records in greater sharing. Bitcoin works with blockchain technology, which compiles all transactional data and regulates the minting of new tokens. It is, however, a decentralized digital currency, not subject to any government or central authority. Bitcoin has a limited supply cap of only 21 million tokens, which gives it significant purchasing power.

Blockchain technology is the backbone of Bitcoin, facilitating seamless payment processing without involving intermediaries. This enables Bitcoin users to provide faster, more secure, and relatively inexpensive cross-border remittance transfers. Blockchain can also facilitate smart contracts and item tracking, generating an accurate record of transactions for all parties involved in transactions, including manufacturers, wholesalers, distributors, retailers, and consumers.

There are more than 1,000 cryptocurrencies today, with an estimated market capitalization of around $2 trillion. Bitcoin is currently the most popular cryptocurrency, accounting for almost half of the global value of digital currencies. Several companies are now accepting Bitcoin as payment for various goods and services.

Many currency exchange platforms, such as The French site of Yuan Pay Group allow traders and investors to buy and sell Bitcoin for other digital currencies and fiat money. Additionally, there are also Bitcoin ATMs that allow sending and receiving money using Bitcoins. Its adoption is still in its infancy, but analysts expect significant growth in the future.

The impact of digital currencies on national security

Experts have pointed out a few implications Bitcoin and other digital currencies would have on national security. One of them is that virtual currencies are easier to launder than fiat money. Unlike cash, Bitcoin users can quickly move their reserves through various untraceable online platforms on the dark web and convert them into legitimate digital assets without attracting attention.

The difficulty of tracking virtual payments is the main feature that raises questions about national security threats. Others believe that the complexity of tracking Bitcoin transactions encourages criminal activities such as money laundering, terrorism, and scams, thereby threatening national security. On the contrary, Bitcoin’s underlying technology might be the best solution to these threats since it validates all transactional records on an irreversible public digital ledger.

Bitcoin has the most secure network, despite the few cases of hacking reported by the media. Furthermore, digital forensics experts have also come up with sophisticated technologies to enhance the security of virtual assets and the tracking of stolen cryptocurrencies. It would therefore be inaccurate to say that Bitcoin can threaten the national security of a country.