In a move that could have far-reaching implications for South Africa’s economic relationship with the United States, Democratic presidential hopeful Robert F. Kennedy Jr. made a significant pledge during a recent Heal-the-Divide PAC event held on 19th July. The prospective future leader of the free world pledged to back the US Dollar incrementally with “hard currencies”, a mix of precious metals and Bitcoin (BTC), should he achieve presidential office. This move, he suggests, could bring stability to the somewhat turbulent American economy.
Kennedy’s proposed plan suggests a careful, considered process. His vision starts with having about 1% of issued Treasury bills backed by hard assets, which could include gold, silver, platinum, or the increasingly influential Bitcoin. Depending on the efficacy of this approach, he would then consider increasing the level of backing for the US dollar accordingly.
Moreover, Kennedy is looking to create favourable conditions for cryptocurrency investment within the US. He has voiced his intention to exempt conversions from Bitcoin to US dollars from capital gains taxes. Such a move, he argues, as reported by Cointelegraph, would encourage domestic investment and incentivise businesses to stay and flourish in the United States, instead of relocating to more cryptocurrency-friendly jurisdictions like Singapore or Switzerland.
Simply put, Kennedy’s strategic plan is to incrementally support the US dollar with Bitcoin and other hard currencies. He believes that this approach will fortify the US economy, paving the way towards financial stability and prosperity.
Kennedy has been openly endorsing Bitcoin, which was particularly evident during his appearance at Miami’s Bitcoin 2023 conference on May 19. At this event, he confirmed that he would willingly accept campaign contributions in the form of Bitcoin.
Despite his enthusiasm for Bitcoin, it was revealed in a recent investment disclosure on July 9 that Kennedy holds up to ZAR 4,465,000 worth of Bitcoin. This revelation contradicts previous statements where he denied any involvement with the cryptocurrency.
While Kennedy’s pledges are bold, he isn’t the only presidential candidate making significant commitments concerning cryptocurrencies. Republican presidential hopeful and current Florida Governor Ron DeSantis pledged on July 14 to outlaw central bank digital currencies (CBDCs) if he ascends to presidential office. DeSantis’ promise to halt any introduction of CBDCs in the US from his first day in office adds yet another twist in the unfolding saga of the relationship between cryptocurrencies and politics.
The developments in the US could have significant implications for South Africa, given its economic ties with the superpower. As the potential for a shift in the US’s approach to Bitcoin and other cryptocurrencies grows, South African investors and policymakers would do well to pay attention.