In the shadow of United States President Donald Trump's trade war with China, we are beginning to see the battle lines drawn in a war for global monetary supremacy, with China's offering representing centralized control and including the suppression of foreign influences.
Foreign cryptocurrencies have been similarly suppressed in China.
According to Zhou Xiaochuan - the ex-governor of the People's Bank of China - local financial institutions have been instructed by regulators that digital currencies should not be recognized as tools for retail payments.
While China is expected to launch a single, centralized, monolithic digital currency and suppress all others, the West is expected to launch a plethora of initiatives - both for retail payment and remittances, such as Facebook's Libra and Telegram's TON, but also business-to-business, or B2B, examples such as JPM Coin and Signature Bank's digital payments platform called Signet.
The banks will be the suppliers of interbank and enterprise payment networks - e.g., the People's Bank of China coin, JPM Coin or Signature Bank's Signet project).
In most cases, the assets are held in a reserve, and if the market value of the coin were to drop, the reserve assets are used to buy back the coin until it regains the target price level.
The reason why "Stablecoin" is a bad name is that there are literally no assets in history that have been known to exhibit a stable value over time - they are only stable relative to the value of another asset.
Another optional property of a stablecoin is redeemability - which means any holder of the circulating asset can, at any time, redeem the circulating asset for the asset in the reserve.
The biggest reason why "Stablecoin" is a terrible name for any cryptographic asset is that it's typical for any pegged, centrally banked asset to be relatively stable vs. the underlying asset - until it's not.
The competition between nations and ideologies - such as China vs. the West - can actively accelerate the delivery of solutions that will form the basis for mass adoption of cryptographic assets.
US-China Trade War and Its Effect on Cryptocurrencies
Published on Aug 31, 2019
by Cointele | Published on Coinage
Coinage
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.