What China is really up to and how it will affect crypto?
China President Xi Jinping proclaimed a couple of weeks ago that blockchain is so integral to the next step of Chinese economic expansion that it would be implemented and enforced in various sectors. That declaration was followed up by the Chinese Central Bank’s affirmation that blockchain could sort out numerous issues the country’s keeping money industry faces.
Jinping’s astonishing statement spurred Bitcoin to a 40%+ boost, the most significant 24-hour surge since 2011. It had us stunned with skepticism, in any case.
The sector seems to have slowed since then. Jinping’s claims, which made it abundantly clear that China is enthusiastic about blockchain technology, did not name any companies, or speak about decentralization.
Before we move on, you need to understand that we are talking about China here. That is the state when the word “democracy” has almost been banned, where they track every step of yours since you step your foot at the airport and where the human rights are practically non-existent. Such a state will never allow trading the asset that they cannot enough control, nor will they let their citizens get rich without the state’s “protective” wing. And under no circumstances will you be permitted to move your crypto freely without their consent. That is not going to happen in a million years. Blockchain, however, as breakthrough as it is, can also be the double-edged sword for all you idealists out there. Keep reading to find out more.
China drives a blockchain arms-race
We can tell from comments, news, interviews, and statements from the government that China has chosen it. The U.S. and most E.U. representatives have expressed interest in blockchain technology but avoided taking key positions or demonstrating an intent to incorporate through sectors. Only Singapore and to some extent, Russia reflected their positive stance towards blockchain.
We assume that China will be the first nation to launch its cryptocurrency worldwide. The time is short because the trade dispute with the United States and the weak Yuan is pushing Chinese investors rapidly into digital payment systems.
Digital currencies such as Bitcoin or Tether can turn the financial world around, the global monetary system, and how investors manage their commercial activities.
It is therefore not surprising that legislatures and central banks are engaged thoroughly in this topic and are keen to track recent progress – and play a vital role in this future race.
It seems that China is ready. Mu Changchun, Executive Vice-President of the Central Bank of China (PBOC) Payments Department, said they would launch their digital currency. They have worked on it since 2014, but it is still unclear how long it will take and the technical requirements on which to build.
Mu Changun said, after all, that currency is legitimized to spend on the central bank and the other financial institutions. The digital currency would lower the cost and facilitate the control of the supply of paper currency by policymakers. And this is what it is about – to increase control over people’s money. Blockchain and its ability to control the flow of funds is unprecedented, making it the wet dream for all those governments. And before you spit at China, watch how fast your “freedom and democratic” government will adapt the idea afterward, leaving your cash and the right to privacy in the dust.
What has fueled that?
Two things are likely to have fueled the development in China.
First, the trade dispute with the United States that ensured the low to the Chinese yuan (lowest since 2008). The U.S. blames Beijing for reducing prices artificially to make its exports cheaper. Also, currency manipulation is the focus here.
The Chinese government shouldn’t like the side effects. Market participants reported that the weakness of the yuan drives demand for cryptocurrencies. America’s tariffs have impacted the Chinese economy, and a slip in yuan has led major investors to turn cash into cryptocurrencies.
The second factor is the Libra effect.
You may know that strict capital controls in China prohibit the transfer of funds abroad. In 2017, China outlawed the Bitcoins market, and mining is now illegal. According to formal reasoning, mining is unsafe, violates legislation and regulations, wastes resources, and pollutes the environment.
Facebook has also stunned the officials of China and the PBOC by the launch of its digital currency in Libra. Now they need to consider the ability to drastically damage the financial system by currencies provided by private companies. The PBOC has already announced that the central bank will control Libra.The E.U. is also working on cryptocurrency, including the G7.
Digital arms race
The government of China does not want to turn a currency like Libra into a triumph for Western technology firms like Twitter, Uber, PayPal and Visa, MasterCard, and 23 others. China would like to control the people’s personal data and supervision and tracking of transactions.
The People’s Republic is fully prepared to train its people for its cryptocurrency of the central bank. The emergence of a global blockchain movement could be the Chinese war on cash, while the rest can only follow.
Can Crypto Yuan become The New Global Reserve?
U.S. banks and politicians should be frightened. As they stumble through their institutions, research and development into blockchain technology and crypto resources are steaming forward in the rest of the world.
Let us say it bluntly: China still doesn’t want to have to do anything with Bitcoin. The regime cannot control it and has little influence over where it flows. What it needs is now clear – to become the next global currency, with tighter control of its supply and users.
In Peking’s long history of population control, a cash war would represent a new attempt to money supervision. A blockchain digital currency provides the regime with more information than anything previously envisaged as to what its people are doing with their money. Given its supervisory advantages, many authorities, including China, are battling to accomplish a cashless society. That is the ultimate goal for the government and the final good-bye kiss for every democratic society.
When that happens, the rest of the world will have no choice but to follow suit it what will be the next digital revolution, definitely not a welcome one by us.
How will it affect crypto?
It merely is not impossible to ignore China’s entrance into the blockchain, no matter how soon the market forgets essential news. Although the result of these events can not be booming immediately for the entire market, it is still possible that awareness of blockchain techniques can be significantly increased, hence impacting the capitalization of the whole industry. Couple that with the incoming Bitcoin halving and the future is not that grim as China wants use to see…
You can join us on Telegram for a follow-up of the market throughout the day.
For any question, our team will be happy to answer you on our support which is open 7/7 days.
For any information about our subscriptions, please visit our website or contact @butler_4c_bot directly to get all the information you need.