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1.
China's Crypto Is All About Tracing — and Power
Beijing will come out of the coronavirus crisis with a big first-mover advantage in official digital currency.
By
Andy Mukherjee
2020년 5월 24일
Strictly speaking, though, the anonymity of cash will no longer exist. Authorities can look under the hood of pseudonymous transactions for unwanted activity, an outcome far removed from the vision that drove libertarians (and money launderers) to cryptocurrencies in the first place. With the outbreak giving legitimacy to intrusive physical contact tracing, the case for financial tracing gets even stronger. Exchange of digital yuan between customers and merchants will pop up on a centralized ledger, and go through far more swiftly than in Bitcoin-style setups that rely on widely distributed ledgers of asset ownership.
Every nation projects power when others desire its money — something that costs the home country nothing to produce. But as with any digital network, the sovereign tokens that take off first could end up winning disproportionately. The digital yuan could find customers overseas, especially in places where China is making belt-and-road investments. For one thing, they wouldn’t have to pay banks fat fees for running the $124 trillion-a-year business-to-business international transfers market.
By distributing digital currency through banks, China has given its big institutions a chance to match the payment technology of fintech rivals. But it’s possible that a central bank in another country would bypass intermediaries altogether, potentially making the state the monopoly supplier of money to retail customers. That, as I wrote in December, could upend banking. The digital yuan may have started modestly, but it might pave the way for changes that are both ambitious and long outlast the coronavirus.
https://www.bloomberg.com/opinion/articles/2020-05-24/china-s-yuan-will-exit-covid-19-with-a-big-digital-currency-lead
2.
China’s new digital currency could encourage worldwide use of the yuan, says CEO
The U.S. dollar is currently the world’s “reserve currency” — about 58 percent of all foreign exchange reserves in the world are in U.S. dollars, according to the IMF, and about 40 percent of the world’s debt is denominated in dollars.
Allaire pointed out that China’s proposed digital currency “bypasses the Western banking system, SWIFT, things like this.” He was referring to the Belgium-based Society of Worldwide InterBank Financial Telecommunications that enables financial institutions to send and receive information on cross-border payments.
The digital currency is “quite strategic,” he said. Allaire added that it would let authorities more easily track monetary supply — allowing Beijing to tackle issues such as corruption and money laundering.
https://www.cnbc.com/2019/09/13/chinas-new-cryptocurrency-and-yuan-rmb-internationalization.html
3.
China Will Use Its Digital Currency To Compete With The USD
위안화의 전자화폐화가 위안화가 미국 달러화를 제치고 국제적 기축통화로서 발전하는 데에 갖는 잇점
1) A digital version of the RMB lets China interoperate between different currency contexts where the USD may start to fade.
For example, central banks that don’t have established swap lines with the Federal Reserve for USD during this COVID crisis may see a spate of debt demand for USD within each of their markets, heightening the value of the USD in the short-term, but probably determining a long-term reckoning on US-dollar denominated debts, while adoption of Chinese tech standards and the ubiquity of mobile payments with the widescale adoption of solutions like M-Pesa, and the creeping growth of AliPay in Africa help heighten the perceived value of the RMB in international contexts.
Various central banks in Africa are straining to prove their credibility after years of inflation and currency devaluation. The Nigerian central banks’ governor is imploring citizens in Nigeria to avoid forex black markets after a shortage of US dollars and a collapse in the price of the domestic naira.
Across the African continent, inflation has been at all-time highs, especially relative to most polities where recorded inflation is low. A digital currency that can interoperate between different African systems or other Belt and Road Initiative Partners as well as what may be their largest trading partner, China, backed by some government force, may be able to sweep the area as people question the value of holding US dollar debts amid collapsing domestic currencies.
2) China is in a technological battle to define standards with emerging technologies: this has been a primal focus of the Chinese state. The amount of state-enforced patents and control of 5G technologies by Huawei can be seen as an example that dovetails with an inherently mobile-friendly approach to currency exchange. Whoever defines the standard of a new technology gets outsize representation in its iterations and can shape where it goes.
A successful transnational digital currency backed by government fiat and force is something private organizations and governments around the world are liable to look at as a model and perhaps as a standard on its own — letting China define digital value for the majority of people on the world, if it were to come to pass.
3) Using digitization and decentralization to a nominal degree helps blunt China’s international weakness — perception around its totalitarian domestic system. By purporting to delegate more control to nominally private organizations as one might see China do with any “decentralized solution”, China can present a digital currency that is more acceptable to local populations than a raw form version of the Chinese RMB, which will be only tied to the Chinese state. Foreigners may not trust the Chinese state, but they may be more inclined to trust Chinese companies from ByteDance (who owns TikTok) to Alibaba BABA.
If this seems far-fetched, consider how China has advanced “One Country, Two Systems” to assuage Portugal and the United Kingdom when it came to Macau and Hong Kong — and how China has acted to float its state-controlled banks and made minor reforms in fiscal regulation partially in order to get greater financial access for its state-based organizations in the American financial system and elsewhere.
China is using the digital RMB as an important tool in its quest to ascend. Keenly aware that the American-dominated political and economic order is what underpins the “rule of law” and “international norms”, the state is looking to leverage new technologies as an asymmetric playing field where incumbency matters little — to create its own rules through standards.
https://www.forbes.com/sites/rogerhuang/2020/05/25/china-will-use-its-digital-currency-to-compete-with-the-usd/#781a6d3e31e8
4. 미국 주류적 사고- 전자화폐화의 가능성을 낮게 평가
Top Facts on China’s Crypto Yuan and Related Blockchain Projects
As China stops the spread of COVID-19 inside the country, the government announced two of the largest crypto and blockchain-related developments.
https://cointelegraph.com/news/top-facts-on-chinas-crypto-yuan-and-related-blockchain-projects