Will China become the next world currency?
The China-US trade war goes a lot deeper than the general public thinks. It would seem as if it is all about the US trying to level the playing field for tariffs. In fact, it is that it is about the PRC pushing to topple the USD and become the new world power.
Let's look at this in stages. First, we have China bullying their neighbors and quietly stretching its physical presence by "building islands" and slowly pushing their international boundaries and control in the Pacific. There are also islands in the Pacific claimed by more than one country, and China is using its military might to enforce their claim. One of their strategies is to beach a naval vessel on the coast of one of these islands, then by default, the island can be claimed.
Second, the battle to take over the USD. Quick history lesson first. The USD became the dominate currency during WWII. It started in 1944 from the Bretton Woods agreement. This agreement also created the International Monetary Fund and the World Bank. Before, most currencies were based on precious metals. Then in 1971, the USD lost the gold backing. Resulting in the dollar becoming nothing more than a note.
So what is backing the USD? Surprisingly less than nothing. It's our debt. I don't understand how debt can back a currency (not into the economy), but it does. The strength of the USD internationally is sustained by the petrol dollar. This is enforced universally by requiring the USD to be used to purchase oil (OPEC). If a country doesn't want to use the USD for this, they usually get blackballed, and the media paints them as "terrorists." This is one of the critical issues behind the US/Iran problem. Look it up, it's fascinating.
Now to keep the USD on top, the USD must stay on top and have no other rival. The Euro tried and failed. Now China wants to play. China, unlike the US, sees the advantages of having a digital yuan and a cryptocurrency that encourages, simplifies international trade, and is controllable. Their current plan is to be similar to the Lyria (FB) but stabilize their currency with other Asian currencies to encourage it to make international trade more accessible and cheaper. The PRC is wise to avoid the Japanese error of Galápagos syndrome.
Implementation of their cryptocurrency would be instantaneous. China's human rights record is a scary thing. Although the PRC is a communist regime, the only communist policies that it uses are controlling the lives of its people and not allowing people to buy property. This means that if China wants to change something, it doesn't matter what it's people think. For example, parts of China went from small villages to big cities in less than a decade. While it sounds impressive, the truth is, it relocated it's citizens to somewhere else and developed at will. Think of the implications for the families. They usually get moved to a new building in the middle of nowhere. There goes the neighborhood.
Cryptocurrency will probably be the same. It will be a "this is a new rule." They have also been priming their citizens for the change. The digital Yuan and "social credit" have pushed their society to accept a cashless society. They even have a face ID payment system that uses these. Add to that; they will probably not allow competitors in the country. So the Chinese cryptocurrency should be very stable with at least 1.4 billion users (that's just China's population).
What would the international market look like for China? Probably pretty good. China is the center of world trade, and since their neighbors' currencies basket their crypto, it will encourage this currency will be used for trade with China.
Now, if things go according to their plan, the above will push their currency to directly dance-off with the USD for the oil market. Since the blockchain is tracible, it would be easy for China to control which countries use their crypto. If the USD loses the petrol dollar, GAME OVER. Insert coin.
Would their crypt be accepted in the US? I'm not sure, but probably not. The US will fight to stay on top. It's good to be the king. Even if the US launched its official crypto, the Chinese crypto will probably be more attractive and more robust.
If the US wanted to implement a cashless society, there are speed bumps at every stop, as mentioned in my article speed bits. In its current polarized state that the US is in, it would face 50% opposition just depending on who says we need it. Religion would be another obstacle. China faces none of these problems. China only allows state religions (this means that the state is above God or gods) and people who publicly denounce the government…dissapear. Usually, they end up in black prisons or "re-education camps" =concentration and reprogramming camps. I'm not making this up. Here is a link to Wikipedia to read about it. All those human rights activists really need to look at the bigger picture.
All the cards are stacked in China's favor. The US has a cancer that is probably terminal. What's more, COVID 19 shows the UN's preference for China over other countries. What else can I say? The dragon has been awake for generations, but now it is starting to take its stance. China is going to change the Cryptoworld.
Picture credits:
The Chinese People's Liberation Army is the great school of Mao Zedong Thought, 1969. A poster from the Cultural Revolution, featuring an image of Chairman Mao, and published by the government of the People's Republic of China.
Concentration camp photo from an article titled "用情感敲开心灵大门 用说理舒缓群众情绪", published by the wechat MP platform account "Xinjiang Juridical Administration", via baidu baijiahao platform archive https://baijiahao.baidu.com/s?id=1564669932542581Original image creator: 牙生, Fair use, https://en.wikipedia.org/w/index.php?curid=58271111
https://en.wikipedia.org/wiki/Cultural_Revolution#/media/File:Cultural_Revolution_poster.jpg
https://en.wikipedia.org/wiki/Human_rights_in_China
https://patch.com/connecticut/middletown-ct/bp--what-is-the-us-dollar-really-backed-by
https://www.businessinsider.com/china-social-credit-system-punishments-and-rewards-explained-2018-4
