I came upon a very interesting piece which predicts that China will be the first major country to launch a Central Bank Digital Currency (CBDC). Especially when I read about their potential for CBDC with regards to China's Belt and Road initiative. Is this the pre-cursor to a 'European Union' of China?
The article by Coindesk is written by Chun Yin Cheung, a partner in PwC China's risk assurance practice, and it describes how China is working full force to perform the necessary groundwork and research for the launch of a CBDC that will be pegged to the Chinese RMB. It will not replace paper money, but instead complement it, so it is still similar to the old money except it will be on a blockchain (presumably controlled by the government of China).
What's more interesting to me is how the article also states that the launch of the Chinese CBDC is in line with the Belt and Road Initiative, also called the Silk Road Economic Belt. In case you're not aware, China is subsidizing and construction a whole network of transport lines, ports and railways and other infrastructure more or less along the same route as the Silk Road of the ancient world. The aim is to create a more efficient and better connected trade route between China and the Eurasian countries.
The countries involved along the route, are of course welcoming to the massive industrial investments made by the Chinese, but one might also wonder about the geo-political effects of this co-operation. The benefits of the new silk road are obvious and the countries involved will definitely benefit from the billions of dollars invested, but the other side of the equation is that China increases it's power and influence over the countries involved, who become ever dependent on the large nation.
DIGITAL CRYPTO-RMB
Enter the Chinese CBDC, which is stated by the article to be in-line with the Belt and Road Initiative and it seems to suggest that the Chinese CBDC may be used as a payment method by countries alongside the route. To me that sounds like a brilliant geo-political strategy: it will internationalize the Chinese currency, and probably make it the de-facto currency of choice in many industries that partake in the Belt and Road Initiative. Is this the 'Euro' of Asia? Does this have a chance of becoming a dominant currency in the region? After all, it has all the benefits of cryptocurrencies, without any of the FUD because it's still backed by a government. It may not appreciate in value because of scarcity, but if a lot of value stops being transferred in a local currency, and instead joins the Chinese economy, it will grow because it has basically annexed parts of other countries' economies into it's own.
This could potentially lead to a de-valuation of the other local currencies if less value is transferred and stored in those currencies and more starts being paid in the digital RMB. It's no different from the crypto markets, really. If money moves out of BTC and into ETH, the first goes down in market cap (economy size?) and the other goes up. I think the same applies to the size of economies in countries. With a declining local currency, and a rising 'asian' currency, what would people start storing their value in? It may not be as explosive as the growth of crypto, but I do think this is a very cunning long term play that has potential.
Once economically connected, perhaps even economically vassalized (?), this has rather large implications for the geo-political world order. China is showing more and more of an outward look and is expanding it's influence across practically the entire world. If the digital RMB truly becomes the de-facto currency of the Eurasian trade route, then China has potentially created a similar situation to the USA and it's 'oil-dollar'. It is said that the US dollar obtains much of it's valuation from the fact that oil is traded in dollars. Could the Chinese CBDC do the same for the RMB?
Additionally, one might wonder if this could eventually lead to an Asian Union, similar to the European Union, with the key difference being that the Asian one will be led and orchestrated by China?
Is this all a bad thing? Not per se. Although China has a shaky reputation from it's past, the country is actually improving rapidly on many fronts. These days China is less viewed with distrust compared with the past, and although one might question their motives one cannot deny their investments in other countries, which do in fact help these countries a lot. It's hard to throw blame before the fact, and we have yet to see how this all pans out. And besides, whatever happens, I don't think we are in any position to really do anything about it. I do think, however, that it's an interesting development to keep an eye on.
> To read the article on Coindesk click here <
Good article, and not enough are asking these types of questions imho. The only addition to your article that I would add would be regarding the consideration of the enormous amount of gold that China has been acquiring. What if their crypto was back by the RMB and by gold?
I also did a two part article that I wrote recently.
https://steemit.com/cryptocurrency/@bon07/the-china-question-s-part-2-the-new-petroyuan
I like your new look posting :) good job mixing comic with pop art
Thanks so much! I liked the icon I used on my profile picture, and wanted some 'branding' to have my posts be more recognizable, so I decided to go with the theme. Worked out pretty well! I use it as my cover pic on my blog profile mainly, but figured I would introduce it on my postings as well. It is part my quest to Steem twice as hard in 2018!! :)
excellent your look now is more "professional" but casual at same time, i have to do something with mine as well the boy with the infrared glasses in my avatar is tooo serious lol
That's exactly the look I was going for!
And I think a type of branding is important on Steemit. It's so hard to remember whose posts you've read before. Perhaps some people have stumbled on multiple of my posts over the past months, but never realized they were all by the same author? This way my 'digital identity' may linger longer in their memories and leave some kind of impression, is what I was thinking.
I think it's a process though! We all start fumbling about, just trying whatever and not caring too much, just slapping some images on there here and there. But as time goes on, and more earnings come flowing in, the more serious you start to take it! Now, after 6 months on here I can only conclude that it has been far more rewarding than I ever thought it would be. So I should probably treat it more seriously too! Who knows, one day, I may be a dolphin!
good luck in your adventure you are on the right track, I continue with my doubts I have never pretended to be a blogger nor do I have enough time or I dedicate myself to this but I have to admit that it has an addictive point lol
I was a skeptic too at first. I started out thinking: Free crypto, why not? And getting as much out as I could. But now that my payout keeps growing over time, I am turning into a believer more and more. I am no longer powering down, in fact.
It's all about engaging with people and bonding a bit, and getting enough followers. I would say that after about 600 followers, my blog started becoming more serious and I went from $0.20 per post to about $1-2 for most of my posts now. I think if you keep at it, it can grow exponentially..
And if not.. well.. any 'free' money is good, of course. I write and talk about crypto all day anyway. Might as well do it here instead of Reddit, and earn some more while I'm doing it!
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