China’s Cryptocurrency Is A ‘Check-Mate’ Move In The US-China Trade War – Broctagon CEO Don Guobr>
Don Guo is the CEO of Broctagon Fintech Group, which specializes in prime liquidity provision, brokerage technology solutions and enterprise blockchain development.
In this Q&A, Guo talks about the evolution of China’s public posturing on cryptocurrencies. He examines China’s own potential cryptocurrency and whether he envisions this as a rival or replacement to the US dollar.
BLOCK TRIBUNE: China’s public posturing for years was of a country against the concept of cryptocurrencies of any type. Was this in your opinion all a ruse to keep attention away from their efforts to develop a cryptocurrency? Or did they change stream at some specific point and decide to develop a cryptocurrency?
DON GUO: China maintains a “closed” capital account, meaning companies, banks, and individuals can’t move money in or out of the country except in accordance with strict rules.
Cryptocurrency, through blockchain or distributed ledger technology (DLT), poses a threat to this system, as it offers a new way for immediate cross-border payment exchange and international settlement.
China had to quickly put a stop to this technology before massive amounts of money was moved out of the country. This full ban happened in January 2018.
BLOCK TRIBUNE: What is their end game in this? Do they envision their cryptocurrency as a rival or replacement to the US dollar as the global benchmark currency?
DON GUO: With that ban, it bought itself time to research on cryptocurrencies, and design a regulatory framework.
This meant that when the time came for announcements from big players, such as Facebook’s recent Libra news, China could quickly announce that it is close to releasing their own cryptocurrency.
Given the potential of digital assets, this move could be check-mate for China in the trade war against the US.
BLOCK TRIBUNE: If that is the case, what is the US doing that is good and what should be changing in their approach to cryptocurrencies?
DON GUO: It is interesting that Trump recently met with Mark Zuckerberg, which could suggest a future collaboration between Trump and Libra as a countermeasure to beat China’s cryptocurrency launch, although details of the meeting were not disclosed.
BLOCK TRIBUNE: Are there other areas of the world getting it right in your opinion and if so, who are they and what are they doing well?
DON GUO: Singapore is the leading the world at the moment in terms of being a conducive environment for blockchain and cryptocurrency companies. In fact, as of February 2019, over 634 companies were incorporated in Singapore with a combined market cap of approximately $8.3B.
Singapore is also ahead of the curve on the regulatory front. In fact, the Monetary Authority of Singapore (MAS) announced in February 2018 that it had been “closely studying” crypto developments and the potential risks they pose.
By moving to facilitate the advancement of technologies, Singapore set itself out as a leading hub for technological development.
BLOCK TRIBUNE: Looking ahead, what major moves are needed in order for cryptocurrencies to gain wider acceptance in society? Detractors argue there is no clear advantage to the widespread population to switch to cryptocurrencies from fiat or to use them as a method of transfer. Are we simply asking people to change well-established behaviours without giving them a good reason for doing so?
DON GUO: While change will always have detractors, the truth is that, thanks to the involvement of governments and institutions around the world, we’re already well on the way to mainstream acceptance of crypto.
And as global governments start racing to launch their own cryptocurrencies in order to keep up with the big tech corporations, this trend is set to accelerate.
And this is a good thing. The spread of a monetary system which is dependent on technology rather than a central monetary authority will pave the way for a new era of financial inclusion, as the technology reaches the unbanked population.
BLOCK TRIBUNE: What will the role of cryptocurrencies be a decade from now? How will we be using them if we are using them?
DON GUO: Cryptocurrency is the future of payments. It could potentially be implemented on a global scale in less than 5 years.
With blockchain allowing all transactions to be traceable, we could even see crypto-wallets integrated onto wearable technology such as watches being used for everyday transactions in the future.
BLOCK TRIBUNE: Is the most potential as a money transfer mechanism and in asset tokenization?
DON GUO: Absolutely. Blockchain’s application for money transfer and asset tokenisation is already apparent. There are several interesting players in the space who have moved beyond proof-of-concept to actual, tangible offerings which are already up and running.
Looking beyond this, blockchain has a wide range of implications for every sector, from healthcare, to gaming, to energy, to luxury, to cloud storage, to fashion, to art, and more.