With bitcoin in the bank, we can ensure financial autonomy and self-determination, no matter who is in power in the White House, in Brussels or Beijing. This is what Torbjørn Bull Jenssen (K33) writes in a comment. We made a mistake when we sold our gold in 2004, but now have a golden opportunity to make amends by being early in the meeting with bitcoin,” he writes.
Torbjørn is CEO of K33.com and K33 AB, listed on Nasdaq First North. Previously he worked in Menon Economics, consulting entities like the Norwegian Central Bank, the Ministry of Finance and the NFSA on digital assets and blockchain. Torbjørn has an MSc in Economics and Econometrics from the University of Oslo with a master's thesis on Bitcoin.
Below is Bull Jenssen's comment.
Norway is a small open economy. We are completely devoid of trade with the outside world, and all trade requires the flow of money. Inside Norway, we have effective systems and national autonomy, but in the face of the outside world, we are completely dependent on relations with other countries and especially the United States, which controls the world currency.
Trump has declared trade war on both near and far, set his sights on Greenland and made it clear that he will put the United States first, no matter what. This abrupt shift is now creating international turbulence and uncertainty that comes on top of a debt-ridden dollar being used as a weapon against those the US wants to frame.
Taken together, these factors are making investors, institutions and governments around the world increasingly look for an alternative to the dollar - a hedge against devaluation, censorship and confiscation.
One challenge is that the United States is not alone in having an unsustainable debt. BIS, the central bank of the central banks, warned recently that the global sovereign debt overhang can destabilize the financial market and of all national currencies, the dollar is fast becoming the least evil.
In the face of these developments, the Czech Central Bank is taking new paths and contemplating whether they should add bitcoin as part of their foreign exchange reserves. Accordingly initative is ongoing both in the United States and in a number of other countries, and Norges Bank should do the same.
The purpose of Norges Bank is to maintain a stable monetary value, promote stability in the financial system and ensure an efficient and secure payment system. As part of this effort, the central bank holds close to NOK 800 billion worth of foreign exchange reserves, of which 50% are in dollars, 34% in euros and 8% in pounds and yen respectively.
All foreign exchange reserves are held as various receivables such as interest rate securities, stocks, and direct deposits in foreign banks and central banks. This gives other countries full access to take direct control of our reserves, should they so wish. Reserves work well in good times, but can become useless when they are really needed.
Furthermore, all Norwegian banks rely on international correspondent banks and payment networks such as SWIFT to facilitate cross-border payments. This, too, is infrastructure where other countries, especially the United States, can take control and limit Norway's financial scope and autonomy.
Historically, countries have kept gold to avoid foreign powers being able to control their reserves, but in Norway we sold our gold in 2004 for NOK 3 billion. At the current gold price, the value would have been 30 billion kronor.
Physical gold is clumsy to move around on, but has the advantage that the owner can have full self-counsel. If you hold gold, you have no counterparty that can bankrupt you or prevent you from accessing your funds. Gold is now rapidly increasing in popularity and JPMorgan Plalegger for the largest delivery of physical gold since 1994 as a reultat of the fears of trade war and instability.
Another asset that is also rapidly increasing in popularity is bitcoin, the digital gold. Bitcoin, like gold, gives full financial autonomy to whoever holds it, but without the hassle of having to move around on a large lump of metal.
This is a huge advantage for a small open economy like Norway. With bitcoin in the bank, we can ensure financial autonomy and self-determination, no matter who is in power in the White House, in Brussels or Beijing.
We made a mistake when we sold our gold in 2004, but now have a golden opportunity to make amends by being early in the meeting with bitcoin.
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