Comment: cryptocurrency superpower competition, China has taken a step ahead

This may be the most valuable speech in 2019.

On October 25, 2019, shortly after President Xi delivered a speech on the 18th collective study of the Political Bureau of the Central Committee, cryptocurrencies such as Bitcoin soared.

The integrated application of blockchain technology plays an important role in new technological innovations and industrial changes. We must take the blockchain as an important breakthrough for independent innovation of core technologies, clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.

— October 25, 2019, Chinese President Xi Jinping

This is a historic milestone. For the first time, the Chinese government has separately emphasized blockchain technology as the core position of the national innovation strategy.

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According to the data of the blockchain analysis platform CryptoNT (above), Bitcoin's 24-hour chain transaction volume soared to more than $300 million, an increase of 80% from the previous day and almost doubled from 7 days ago.

(The volume on the Bitcoin chain is the most realistic and transparent indicator of blockchain activity, capturing real blockchain transactions associated with cryptocurrency exchanges such as Coinbase. Internal order transactions that are boasted by each exchange Compared to the amount, it is much more difficult to manipulate this indicator.)

A few hours after President Xi’s press release, the price of Bitcoin rose to $10,000, a record high in a month.

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Facebook's stable currency project Libra is dying in the US Congress

On October 23, Zuckerberg tried to explain the stable currency project Libra to members of Congress at the US Congress hearing, but the result ended in disappointment. I summed up the two main points of the hearing:

Zuckerberg tried to alleviate the concerns of US government officials about digital currency, and also conveyed the message that if Facebook does not launch Libra, then the world will eventually use China's Libra.

Zuckerberg used "peer pressure" to pressure the US Congress, suggesting that the two superpowers will issue a cryptocurrency similar to Libra, just a matter of time. A few days later, his fears became a reality.

When asked if he wanted to move Libra's headquarters from Switzerland to the United States, Zuckerberg's reaction explained everything.

US Congress officials asked Zuckerberg why the Libra Foundation was established in Switzerland and not in the United States. Zuckerberg said: Switzerland is more friendly to cryptocurrencies. This is obviously not the reply that Congress wants.

In 2019, the geopolitical pattern of cryptocurrency

With the economic recession predicted by Kangbo theory coming, the geopolitical pattern of cryptocurrency in 2019 has become extremely complicated.

This geopolitical pattern mainly consists of four forces, two superpowers and two small forces:

  • United States: This global economy superpower has always been conservative about cryptocurrencies. The United States has the highest financial compliance standards, which has led to the recent closure of the company’s services to open US currency transactions with US citizens. Facebook's stable currency project Libra is also one of the primary goals of the US Congress challenge. The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Financial Supervisory Authority (FinCEN), and the US Internal Revenue Service (IRS) have strict regulations on cryptocurrencies, which greatly increases compliance with cryptocurrency items. Standard cost.
  • China: The first token issue (ICO) has been banned by the government since September 4, 2017, but the People's Bank of China has been studying digital currency electronic payments (DCEP) since 2014. In addition to mobile payments such as WeChat or Alipay, it is closer to the "Stabilized Coin Version of the Renminbi."
  • Europe: Switzerland/Malta. The two countries have been very friendly to cryptocurrencies and have created a number of compelling cryptocurrency projects such as Ethereum, Coin, and Facebook's Libra.
  • Singapore, Japan, South Korea: As an Asian economic powerhouse, Singapore is known for its friendly business environment and low tax incentives and has been the location of many ICO projects. Japan and South Korea have always been friendly to cryptocurrencies and are home to cryptocurrency exchanges such as Bithumb and Upbit.
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    Image source: Cointelegraph

    In the future, what is the outlook for global cryptocurrencies?

    Obviously, the above two small forces have neither economic strength nor political power to influence the future global cryptocurrency pattern. The future of cryptocurrencies depends on two superpowers: the United States, which accounts for 23.6% of the global economy, and China, which accounts for 15.5% of the global economy.

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    Image source: investopedia.com

    In 2019, the Sino-US trade war caused huge geopolitical uncertainty, and the exchange rate war became more and more fierce. The depreciation of the renminbi (currently $1 to $7.05) may be related to the US$300 billion US-China tariff.

    What changes will the president’s speech on the blockchain bring to this competition? Will the RMB version of DC/EP be launched?

    One thing is for sure. With the $300 million speech on October 25, China has taken a step ahead in the game of cryptocurrency superpowers.

    The author of this article is Victor Fang, who analyzes CryptoNT.com, a subsidiary of AnChain.AI.