Major Powers are Building Cryptocurrencies to Opt-Out of the U.S. Dollar!
It’s been a nonstop week full of action for the crypto community. Craig Wright, the self-proclaimed creator of Bitcoin, was ordered to hand over $5 billion as the result of being sued, the crypto markets have taken a plunge, and Bitcoin looks set to retest key levels in the $9,000 range. With all this going on, quiet innovation continues to move forward.
Bitcoin price dip (Aug 29th, 2019) BTC/USD Bitstamp, source: https://www.tradingview.com
Based on the geopolitical and economic uncertainty, it’s safe to say the world is in the early stages of a currency war that has been quietly bubbling away for years.
The establishment of the BRICS’ economic block, gold being purchased by Russia and China at record levels, and sanctioned countries using alternatives to the U.S. dollar all show symptoms of a global divide.
News of Russia and Iran exploring state-backed digital assets supported by gold have circulated the Internet for quite some time, but according to a report by Forbes, the People’s Bank of China (PBoC) will launch and distribute its own cryptocurrency amongst a handful of institutions and technology firms towards the end of the year.
“Paul Schulte, who worked as global head of financial strategy for China Construction Bank until 2012, says the largest bank in the world, the Industrial and Commercial Bank of China, the second largest bank in the world, his former employer, the Bank of China, the Agricultural Bank of China; two of China’s largest financial technology companies, Alibaba and Tencent; and Union Pay, an association of Chinese banks, will receive the cryptocurrency.” – Forbes
While the news about this Chinese cryptocurrency remains extremely limited, it follows the Chinese government’s crackdown on ICOs, cryptocurrency exchanges, and mining. With a population of over one billion, Internet and digital platforms powered by tech companies will likely help spearhead mass adoption of the new digital currency.
This shift towards an independent currency with greater security, efficiency, and operating outside the dominance of the dollar could be the first step of many towards a global currency and the end of the dollar’s role as reserve currency. This interestingly echoes what the Bank of England Governor suggested last week about the dollar’s role in finance.
On the other side to the news by Forbes, other media outlets are denying the sources of information and deeming it as unreliable and a “baseless assumption,” so the reality of a Chinese-backed cryptocurrency launching this year (or at least the distribution of it) is still not fully revealed.
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.