Xi loves him some Blockchain
President Xi Jinping commits to building China's financial infrastructure on blockchain technology
Today I’m taking a break on overcoming client objections to talk China. Frankly, I’m not a supporter of China’s politics nor any of the abuse happening in Hong Kong. Setting that aside it’s important to look at the impact of President Xi Jinping's statement that his administration would embrace blockchain technology. Unless you're passionate about blockchain technology it’s hard to visualize or understand the impact of Xi’s words'; this is why I hope the following data from WeChat grabs your attention. Bitcoin and Blockchain are more mainstream in China than the US yet given Xi’s words searches spiked tremendously on 10/25. This spike represents a mass population that is about to see their “money” go completely digital.
The People's Bank of China (PBOC) has been studying DCEP (central bank digital currency) for five or six years and it is maturing. On 10/28, at the first "2019 Bund Financial Summit", remarks by Huang Qifan, Vice Chairman of the China International Economic Exchange Center continued to provide transparency into how China is approaching digital currencies.
The PBOC is likely to be the first central bank in the world to introduce digital currency. Huang criticized some enterprises of trying to “challenge sovereign currencies” by issuing Bitcoin and Libra. Currencies based on blockchain are separated from sovereign credit and so may affect “value stability” and wealth formation in society.
Huang followed with, "I don't believe Libra will succeed. For sovereign countries, the best way to implement currency distribution rights is to issue sovereign digital currencies by the government and the central bank. The significance of DCEP is that it is not a digitization of the existing currency, but an alternative to M0 (cash in circulation).”
He believes that “the SWIFT and CHIPS systems relying on slow technology updates and difficult security guarantees have no future.” Honestly, I agree under the drive of big data platform and blockchain technology, a new clearing settlement will be constructed.
Huang Qifan concluded, “Looking ahead, new financial formats such as quantitative investment, smart investment, artificial intelligence pricing and claims accounting, financial cloud services, blockchain deposits, etc. are evolving and will lead the financial industry into a new era.”
What does this all mean?
This is a point in time that many economists, historians, and scholars could highly attribute to a “tipping point” in blockchain technology in years to come. China has stepped on the proverbial gas pedal and slammed it to the floor; meanwhile, the US is pumping the brakes. China already has a leg up on its payment technology in comparison to the US; now their central bank wants to digitize its currency. China appears to be very forward-thinking and understand the profound impact that a digitized Yuan could have for them globally. Even though China is slowing in economic growth they are still growing up from a teenager into an adult in terms of global power. China’s outpaces the US on many fronts including technology, work ethic, and population. If the digital Yuan takes hold globally and becomes a preferred currency utilized for settlement; then there is a strong chance the US dollar will be unseated as the world’s reserve currency. This would not be good for saving’s accounts of Americans.
I’m hoping the Fed takes China’s decision seriously and really has been planning a solution for digitizing the US dollar. In the meantime, this guy will continue to accumulate that orange, non-sovereign digital coin called Bitcoin because frankly, I trust math & code over government decisions.
Onwards & upwards!
Bly 🏁
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Mad respect for this guy and his beer > body attitude.
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CEO of Twitter loves him some Bitcoin.
⚠️Infographic⚠️
📜Random Interesting History 📜
October 29, 1929
Today in 1929 was known as “Black Tuesday.” The Dow Jones Industrial Average fell 12% in one day, after having fallen 13% on the 28th. This precipitous drop helped kick off the Great Depression, the worst economic downturn in U.S. history. The market didn’t bottom out until July 1932 at 41.22 points, 89% down from its high of 381.17 reached on Sept. 3, 1929. A new high wasn’t reached until 1954
😮Yes that did happen😮
Notice the date; the next day Bitcoin rose 30%+ or the best rally Bitcoin has had in a 24 hour period since 2011.
🏁For the win🏁
EMAW!
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Disclaimer: None of the content in this newsletter is meant to be financial advice. Please do your own due diligence before taking any action related to content within this article, and yes I am personally invested.