Most the world’s approximately 12,100 nuclear weapons are held by just a handful of major world powers. The U.S. and Russia hold nearly 87 percent of the world’s nuclear weapons, with Russia possessing approximately 5,500 and the US holding approximately 5,177, declared  weapons, many of which remain in a state of high alert. China possesses an estimated 600 operational nuclear weapons, with the number having grown by over 100 in recent years. France is estimated to have 290 warheads; the UK, 225; India, 180; and Pakistan, 170. These countries have all maintained stable stockpiles through modernization efforts. However, North Korea maintains an estimated 50 nuclear weapons, but is aggressively developing its nuclear delivery capabilities, including the development of solid-fueled ICBMs and nuclear-capable submarines with Russian backing.

These developments present the growth in nuclear arsenals and nuclear technology, rather than a reduction. The growth includes the qualitative development of nuclear delivery technology, such as hypersonic vehicles and Multiple Independently Targetable Reentry Vehicles (MIRVs), which has undermined the existing balance in the arms race established because of the Cold War.

The New Strategic Arms Reduction Treaty (New Start), which remains the last bilateral US-Russian nuclear weapons agreement, is scheduled to expire on February 5, 2026, without any proposed replacements because of disagreement on the treaty’s terms. In 2023, Russia withdrew from the inspection and data sharing provisions in relation to Ukraine, but the two countries have openly stated to voluntarily meet their respective limit requirements under the treaty since then. If the treaty is allowed to lapse, it is anticipated that each side could begin to increase their nuclear weapons arsenal, which could prompt other nuclear-capable states, including China, to do likewise.

Additionally, the upcoming review conference of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) set to occur in New York in April 2026, presents additional challenges. Past NPT review conferences have been unable to reach a consensus primarily because of the anger expressed by non-nuclear states toward nuclear-armed states for failing to meet their obligations under Article VI of the treaty to pursue disarmament. As a result of this failure, several treaties relating to the regulation of nuclear weapons, including the Comprehensive Test Ban Treaty (CTBT) have been signed but not ratified by key signatory states and therefore lack the needed verification mechanisms.

Iran may also be motivated to obtain nuclear weapons for the purpose of providing a deterrent against Israel’s expanding conventional and nuclear capabilities. Iran’s nuclear weapons program is one of the most pressing issues confronting the United States and Israel today. Iran is now stockpiling uranium-enriched to 60% levels that are close to the level of enrichment required to produce nuclear weapons. It is also developing new centrifuges at its underground facility, known as Fordow, and is shortening the time it takes to produce a nuclear weapon despite continuing economic sanctions and airstrikes against its military assets.

Further, North Korea indicated that 2025 would be a “crucial year” for its nuclear weapons development program and announced that it successfully tested its Hwasong-20 Intercontinental Ballistic Missile (ICBM) and has increased the size of its nuclear facility at Yongbyon; it intends to complete construction of missile factories by 2026. Regional conflicts on the Korean Peninsula and in the Middle East, especially those involving Iran and Israel continue to pose a substantial risk of unintended escalation in the increasingly complex and multi-polar world we live in today.

Disarmament is nothing more than a relic of a bygone era. Nuclear-armed states are engaging in modernization efforts and the language used by these states appears to lower the threshold for using these weapons, seen from Russia’s nuclear threats regarding Ukraine to the lowering of nuclear alert status. Verification is touted by some as much as possible through the International Atomic Energy Agency (IAEA); however, the nuclear powers are unwilling to provide the level of transparency needed to verify compliance with any proposed disarmament treaty. Furthermore, although non-proliferation efforts have successfully limited the number of new nuclear weapons being developed, until nuclear-armed states reduce their own arsenals, non-proliferation efforts will remain a hollow pillar.

In 2026, nuclear arsenals among the great powers are expected to continue expanding. At the same time, the expiration of New START is likely to lead to the failure of the NPT Review Conference, further weakening the Nuclear Non-Proliferation Treaty regime. These challenges will be compounded by the emergence of modern technologies, including artificial-intelligence–enabled command systems and hypersonic delivery vehicles, which increasingly blur the line between conventional and nuclear capabilities. When combined with the proliferation activities of states such as Iran and North Korea, these developments will place unprecedented strain on diplomatic efforts to prevent conflict and miscalculation. This risk is heightened further by escalating tensions among the world’s major powers.

Ms. Harsa Kakar is working as an Assistant Research Fellow at Balochistan Think Tank Network (BTTN), at BUITEMS, Quetta, Pakistan. She is an MS International Relations Scholar at BUITEMS, Quetta, and a distinguished graduate of International Relations from the University of Balochistan. She specializes in AI, Global Politics, Diplomacy, Soft Power, and Conflict Resolution. Views expressed in this article are her own.

The Dawn of 2026 and Challenges to Non-Proliferation was originally published on Global Security Review.

Too few Americans contemplate the role of digital currency volatility in acting as a barrier or an enabler to nuclear deterrence. The reality is that there are opportunities and risks that volatile cryptocurrency plays in the strategic calculus of nuclear states.

Cryptocurrency and Geopolitical Shifts

Cryptocurrencies are decentralized and borderless, challenging traditional financial systems and reshaping how states interact economically. Their volatility stems from market immaturity, speculative trading, regulatory uncertainties, and evolution of these ever-changing technologies. Essentially created to prevent intermediaries, like banks and financial institutions, cryptocurrencies lay the foundation for trustless transactions for illicit activities.

This volatile mix of person-to-person transactions and zero oversight introduces both unpredictability and opportunity, raising questions about their implications for nuclear deterrence, which now must deal with a domain that includes ungoverned access to financial streams that can be used by state and non-state actors to engage in elicit behavior that undermines deterrence stability.

Nuclear deterrence relies on a delicate balance of power, with states maintaining assured second-strike capabilities to dissuade adversaries from initiating conflict. This balance hinges on credibility and capability. Cryptocurrencies, with their volatile swings in value, could serve to undermine stability within a country or enable elicit actors to engage in a range of nonnuclear actions that undermine strategic stability.

The Risks of Cryptocurrency Volatility as a Barrier

Cryptocurrency volatility can act as a barrier to nuclear deterrence by creating financial instability and undermining a state’s ability to project economic power. Traditional nuclear powers depend on stable economies to maintain robust defense capabilities, fund deterrence strategies, and support diplomatic efforts. Sharp and unpredictable fluctuations in digital assets can undermine financial stability, weakening a state’s capacity to fund critical defense initiatives.

For the United States, crypto is not a major issue currently. But, for North Korea, who funds its nuclear program through elicit activities, crypto is important. Proliferators also use crypto to conduct activity. Instability in crypto makes illicit activity even more high stakes and unpredictable.

Instability creates advantages for state and non-state actors to exploit cryptocurrency markets for nefarious purposes, such as evading sanctions, financing proliferation, and bypassing traditional financial controls. The decentralized nature of cryptocurrencies complicates efforts to monitor, track, and regulate illicit activities, potentially undermining efforts to prevent the spread of nuclear weapons or restrict financing for state and non-state actors pursuing destabilizing weapons programs.

Cryptocurrency instability also presents a challenge to strategic stability through cyber threats. If critical financial systems or exchanges are disrupted, or if adversaries manipulate markets to harm a nation’s economy, it could create economic shocks severe enough to destabilize deterrence relationships, increase miscalculation risks, or fuel insecurity-driven arms build-ups.

The Darknet and Conflict Escalation

Darknet cryptocurrency markets empower bad actors by offering anonymity and decentralized financial tools, enabling a wide range of conflict-escalating activities. These markets facilitate the purchase of illegal arms, military-grade technology, and hacking tools, often used to destabilize regions and target critical infrastructure (command-and-control systems) through cyberattacks.

Terror organizations leverage cryptocurrencies for anonymous funding, allowing them to finance operations, recruit globally, and expand their influence. Sanctioned entities exploit these markets to bypass international restrictions and acquire resources that fuel aggressive actions.

The ability to transact anonymously with cryptocurrencies also shields organized crime, including narcotics and human trafficking, whose revenues often fund conflict zones and insurgent groups. Covert exchanges on the darknet can increase espionage, destabilize international relations, and provoke hostilities to serve a radically motivated agenda.

In parallel, extremist groups utilize these platforms to spread propaganda, incite violence, and radicalize populations, further destabilizing fragile regions. The combination of anonymity, decentralized systems, and hidden economies presents a formidable challenge for global security efforts aimed at conflict prevention and stability.

Cryptocurrency as an Enabler of Nuclear Deterrence

On the other hand, cryptocurrency volatility also opens new avenues for strengthening nuclear deterrence through financial resilience and innovation. The decentralized nature of digital assets can enable states to diversify their financial resources and reduce dependency on traditional systems that might be vulnerable to adversarial influence or geopolitical tensions. In times of economic crisis or sanctions, cryptocurrencies can provide states with alternative means to maintain fiscal stability, thus supporting their deterrent capabilities. Countering bad activities with good can be as challenging as the reliance on traditional financial stability for positive security assurance.

Furthermore, blockchain technology, which underpins cryptocurrencies, offers potential for transparency, accountability, and verification mechanisms in arms control agreements. By leveraging blockchain, states can create tamper-proof records for tracking nuclear materials, enhancing verification regimes, and building trust between adversaries. The volatility of digital assets may fuel innovation and drive investment into these applications, ultimately strengthening nuclear stability and deterrence structures.

Balancing the Risks and Opportunities

While the volatility of cryptocurrencies poses undeniable risks, it is essential to approach them with a nuanced perspective to find the right balance between risk and reward. Policymakers must strike a balance between leveraging the opportunities that digital assets present and mitigating their risks to global security. Collaborative efforts to regulate and stabilize cryptocurrency markets can reduce the likelihood of financial instability while harnessing the potential of decentralized systems.

In addition, enhanced cybersecurity measures must accompany any state or multilateral effort to integrate cryptocurrency into the financial systems that underpin deterrence capabilities. Protecting digital infrastructure against malicious actors will ensure that the advantages of decentralized assets are not overshadowed by their exploitation for destabilizing purposes.

A New Strategic Frontier

The volatility of cryptocurrency markets is both a challenge and a frontier for instability of nuclear deterrence. While it poses risks through financial instability, illicit use, and cyber threats, it also offers opportunities for financial resilience, innovation, and transparency. In today’s evolving digital environment, nations must adapt to this dual-edged sword, developing strategies that incorporate the volatility of digital assets into a comprehensive approach to deterrence.

Ultimately, whether cryptocurrencies become a barrier or enabler of nuclear deterrence depends on how nations, regions, and regulators in the broader international community respond to this evolving challenge. By advocating cooperation, innovation, and regulation, cryptocurrencies can strengthen global security architectures and contribute to a stable nuclear order—turning volatility into a force for strategic stability and peace.

Greg Sharpe is the Marketing and Communications Director at the National Institute for Deterrence Studies. The views expressed in this article are his own.

The Volatility of Cryptocurrency: Barrier or Enabler of Nuclear Escalation? was originally published on Global Security Review.