China’s Digital Asset on the Horizon: Chinese Official
On Friday, China’s leader, President Xi Jinping, absolutely floored the cryptocurrency and blockchain industry. In a political context, the world leader called for the adoption of blockchain “as an important breakthrough for independent innovation of core technologies.”
Shortly after Xi’s statements went public via state-run television outlets and media, China — like all of it, really — sprung into action, trying to announce crypto and blockchain initiatives as fast as possible.
Banks invested in Bitcoin startups, online educational portals began to offer blockchain lessons, and “blockchain” began to trend on China’s versions of Google and Facebook.
Most recently, an executive at a Chinese think-tank claimed that the People’s Bank of China’s digital asset is still on its way. In fact, he claimed that the digital asset will be the first of its kind to launch in the world.
China’s Crypto Nears
Speaking at the Shanghai Bund Summit, Huang Qifan, former deputy director of the Congressional Financial and Economic Affairs Committee, said that China is likely to be the first to launch its own digital currency. Huang backed this comment by reminding listeners that the PBoC has been working on cryptocurrencies for five or six years now.
According to a Sina Finance report breaking down his remarks, he expects this to happen due to the financial benefits that can be had with a nationalized cryptocurrency and related blockchain applications. The benefits Huang foresees include an improvement in the efficiency of industry in China by better connecting enterprises, a decrease in the value proposition proposed by something like Bitcoin or Libra, and the ability to reshape how trade settles. Huang also said that the current SWIFT system, which is the de-facto backbone of the global economy, is antiquated:
“SWIFT is an outdated, inefficient and costly payment system. Since the establishment of SWIFT 46 years ago, the technology has been updated slowly and the efficiency has been relatively low.”
Oh, the Hypocrisy
For some reason or another, the idea China will soon be launching its own digital currency, coupled with the other recent instances of adoption, has been widely celebrated in the cryptocurrency community. If you peruse Crypto Twitter, you will notice that it is chock a block full of individuals celebrating the nation’s decision to embrace blockchain technologies.
On the surface, this seems logical: the world’s largest country by population seriously supporting a nascent technology, one that many in this community have a vested financial interest in, should do wonders. Indeed, Chinese leader President Xi Jinping’s endorsement of blockchain was the seeming catalyst that kicked off a 42% rally. All it took was one speech.
But, if you dive a bit deeper, you will notice there are growing tensions in the community. The point of contention is the fact that those involved in Bitcoin — who previously waxed poetic about the benefits of decentralization and the disempowerment of governments and corporations — are shilling the Chinese government.
Peter McCormack, a popular pro-Bitcoin commentator and seeming libertarian, wrote the following sarcasm-dipping message conveying the hypocrisy of this trend:
“This is big! The tyrannical, oppressive, murdering, censorship happy, ethnic cleansing, human rights-abusing CCP stepped up their surveillance plans. Let’s all turn a blind eye because yay blockchain.”
Nic Carter of CoinMetrics echoed this line, writing a thread about the whole hypocrisy of those on Crypto Twitter. “All you people that are ready to forsake all of your values for the sake of riding some authoritarian driven pump, I want nothing to do with you,” the long-time Bitcoin proponent stated.
While it isn’t clear how these micro-conflicts will play out, China’s decision to adopt some form of blockchain should further bifurcate public blockchain technologies from their private, centralized counterparts.
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