ALARMING! How China will take over the world.

ALARMING! How China will take over the world.


Introduction.

In this article we compare China, the USA and Europe with regards to the development and deployment of their respective Central Bank Digital Currencies. Let's start with China, for the simple reason that they're leading the pack. And let's not forget these crucial words: "Give me control of a nation's money and I care not who makes it's laws" Mayer Amschel Bauer Rothschild

China's National Digital Currency DCEP.

What is it? The world's first Central Bank Digital Currency (CBDC) will be the Chinese national digital currency DCEP (Digital Currency Electronic Payment, DC/EP), and will be built using groundbreaking innovative technologies such as blockchain and cryptography.

Who owns it? After being in development and testing for more than 5 years, and issued by the People's Bank of China (PBoC), it will be the only legal digital currency in China, a country claiming that only governments and central banks should be allowed to issue currencies. A strategy that fits their surveillance capitalistic worldviews, but causes friction with western powers where the private sector leads innovation, not the governments, and where people are 'free'.

What is it strength? DCEP will allow China the tools needed to compete at a much more efficient scale with other nations, due to its data driven financial system, with real-time data collection, bookkeeping and other useful tools, allowing the central bank more supervision and control over the nation's monetary policies. Furthermore the new system will be designed to cut bank transfer costs and alleviate anonymous counterfeiting, money laundering and illegal financing.

Are there hidden ambitions? Given the fact that China no longer has an appetite for US treasuries, western nations need to deal with the possibility that China wants to become a much bigger player withing the reserve currency sector, currently lead by the US (60%) and Europe (20%). Furthermore, China no longer wants to rely on western cross border clearing houses and systems such as SWIFT or CHIPS, which they interpret as US owned, and which they suspect of holding back China's full potential.

How will it be tested and deployed? In 2020, China confirmed successful testing in Shenzen, Chengdu, Suzhou and Xiong'an. Four major state-owned banks (China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China), will deploy the new currency system. Once the system's security is validated, two large fintech companies, Tencent and Alibaba, will distribute the digital currency through WeChat and AliPay. Technical and market promotion efforts will make people accustomed to using digital currencies. Testing by foreign firms such as Starbucks, McDonald’s, and Subway show the reality: China has big aspirations.

In the field. Merchants must accept DCEP through digital payment apps such as Apple Pay, AliPay and WeChat. Huawei's Mate40, the company's new smartphone will enable a hardware wallet for DCEP.

Hidden dangers. When you own DCEP, you own a currency fully centralized and controlled by the Central Bank of China, who can devalue your wealth by creating as much as they want from it. A process also happening to all fiat currencies, including the USD and the EURO. This is in contrast to Bitcoin, which operates on an open decentralized network and has a supply of 21,000,000 BTC. Chinese counterfeiters have already created fake DCEP's, knock-off clones, something China is all to well experienced in.

The Belt and Road Initiative aims to bypass the US monetary system and economic leadership by including the world's unbanked into the Chinese system, a system perfectly set up to allow for adoption of it's currency through the implementation of smartphone wallets, present in most of the countries that are part of the Belt and Road initiative. Connecting Asia with Europe and Africa weakens America's super power and threatens to destroy its global presence. The DCEP can therefor be considered as a weapon in economic warfare.

The United States.

After being the absolute superpower, both military and economically, China has taken a serious bite out of America's productivity growth. Promising them low wage workers, access to a huge consumer market and millions in profits, the American entrepreneurs took the bait and left their own country, on a course to the promised land: China.

Beaten by the traps of capitalism and invested in the expensive wars in the Middle East, the United States didn't see that China had its own war, and quietly took over the world's manufacturing base. President Donald Trump was probably the first and last president to openly fight this exodus of US-manufacturing to China, with candidate Joe Biden never even mentioning 'China'. It is therefor assumable that the US doesn't seriously consider the possible damage caused by the Chinese Belt and Road Initiative combined with a bypass of the USD-system.

Is it all too late? Will the West lose its long tradition of issuing the world's reserve currencies (..., British Pound Sterling, US Dollar). Or will a revived Western Alliance consult efforts to beat China at its own game and keep its global power?

Europe.

It needs to be said: Europe doesn't have any social networks to implement a digital Euro. It might use the traditional retail banking sector to offer people access to digital currencies and its CBDC. Only a few countries are invested in the fintech industry and the lack of knowledge of monetary economics is the Eu's Achilles heel.

Conclusion.

The United States and Europe need to talk about monetary collaboration: combined they are strong, on their own...? Donald Trump's economic war on China and Europe has destroyed the 1944 US-EU alliance. He played right into China's cards with that disaster. It is crucial for both superpowers to revive these diplomatic ties. If we allow China to break into our coalition, we're not going to survive, let alone win.

We might even end up with a social credit system that will destroy our typical western human rights such as privacy and freedom.

Disclaimer.

I wrote this article because the subject interests me and it allows me to better remember things when I write them down.


CryptoBible00789
CryptoBible00789

Interested in cryptocurrencies and global financial system.


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