Quote from: Accountsell on January 28, 2020, 11:10:42 AM

Quote from: Hydrogen on January 02, 2020, 12:39:16 PM

Quote

China is poised to launch the first national digital currency. There will be no counting the disruption.

So is China readying its own Bitcoin? Banish the thought.

Its far bigger than that. Yes, just like any other cryptocurrency or for that matter, cigarettes in prisoners-of-war camps the upcoming digital yuan will be tokenized money. But the similarity ends there. The crypto yuan, which may be on offer as soon as 2020, will be fully backed by the central bank of the worlds second-largest economy, drawing its value from the Chinese states ability to impose taxes in perpetuity. Other national authorities are bound to embrace this powerful idea.

Little is known about the digital yuan except that its been in the works for five years and Beijing is nearly ready to roll. The consensus is that the token will be a private blockchain, a peer-to-peer network for sharing information and validating transactions, with the Peoples Bank of China in control of who gets to participate. To begin with, the currency will be supplied via the banking system and replace some part of physical cash. That wont be hard, given the ubiquitous presence of Chinese QR code-based digital wallets such as Alipay and WeChat Pay.

It may start small, but the digital yuan can disrupt both traditional banking and the post-Bretton Woods system of floating exchange rates that the world has lived with since 1973. No wonder that for China, blockchain and the yuan digital currency are a national strategic priority almost at the level of the internet, says Sanford C. Bernstein & Co. fintech analyst Gautam Chhugani.

Ever since the advent of the 17th-century goldsmith-banker in London, the most crucial thing in banking has been the ledger, a repository of irrefutable records to establish trust in situations where it doesnt exist. When Peter in Vancouver agrees to send money to Paul in Singapore, theyre forced to use a chain of interlinked intermediaries because theres no ledger in the world with both of them on it. Blockchains distributed ledgers make trust irrelevant. Paul devises a secret code, and shares its encrypted version with Peter, who uses it to create a digital contract to pay Paul. A cumbersome and expensive network of correspondent banks becomes redundant, especially when it comes to the $124 trillion businesses move across borders annually. Imagine the productivity boost; picture the threat to lenders.

China isnt the only one experimenting. Fast, cheap cross-border payment settlement is one application of JPMorgan Chase & Co.s Quorum, an Ethereum-based platform on which the Monetary Authority of Singapore is running Project Ubin, an exploration into central bank digital money. These are early days, but if blockchain technology shows promise in handling a large number of transactions simultaneously, then digital currencies could become substitutes not just for physical cash but also for bank reserves.

Thats when the game changes. Reserves at a central bank are maintained by deposit-taking lenders. A digital yuan or Singapore dollar or Indian rupee could bypass this system and allow any holder of the currency to have a deposit at the central bank, potentially making the state the monopoly supplier of money to retail customers. As Agustin Carstens, the general manager at the Bank for International Settlement, noted recently, If the central bank becomes everybodys deposit-taker, it may find itself becoming everybodys lender too.

But why would central banks want to demote their own banking systems? One answer, looking at Europe and Japan, is that negative interest rates are doing that anyway. Lenders are starved of profit because while the central bank charges them for keeping money on deposit, they cant as easily pass on those negative interest rates to their own depositors. If the global economy gets mired in long-term stagnation, official digital currencies will at least be an efficient way of monetary easing without involving banks.

The other, more concrete, reason may be that technological progress is making the status quo untenable. Its no coincidence that China hastened its national cryptocurrency after Facebook Inc. announced the Libra project, which was touted as an alternative dollar. Perhaps that was fanciful, and the Libra has hit a wall of regulatory concerns. But if theyre offered like Spotify gift cards at the local 7-Eleven, there will be demand for tokens that are acceptable across borders, stable in value against baskets of national currencies, and can be used in global trade and investing. Someone in Silicon Valley will eventually succeed, blowing away the fig leaf of monetary sovereignty in emerging markets in the process.

The changes wont end with banking and monetary arrangements. Token transactions will be pseudonymous: If the central bank wants to see whos spending where, it can. Anonymity disappears when cash does. While that will make life difficult for money launderers and terrorists, it could also become a tool to punish political activism. Meanwhile, currency as a foreign policy weapon loses some sting. Pariah states will covet a crypto they can access by circumventing banks that are terrified of flouting Western sanctions. As Harvard University economist Kenneth Rogoff notes, technology is on the verge of disrupting Americas ability to leverage faith in its currency to pursue its broader national interests.

A roller-coaster decade not just for for banking and money but also for privacy and politics may just be beginning.

https://www.bloomberg.com/opinion/articles/2019-12-29/china-has-edge-over-silicon-valley-to-end-banking-as-we-know-it

....

According to this, china sped up development of its national digital crypto currency after facebook announced its libra plans and could release it in 2020.

One of the things that made america great was it being a previous hotbed of innovations and futuristic progress.

Today lawmakers appear determined to ensure america does everything within its power to oppose and obstruct innovations like bitcoin/blockchain/crypto.

While china and europe does the opposite. And so perhaps this represents a small microcosm of the paradigm shift taking place.

I already stopped using the banking systems only due to the blockchain tech.
I loved being with bitcoins and hence I have minimized my local transactions with the banking sectors.
This makes me feel confortable with my money and also no one has track on my money anymore.

You did a great job buddy, it will surely improve the crypto economies in our countries we should use block chain because it is safer to use than keeping your money into banks. Till now I did not get any satisfying profit for storing my money in banks. Investing in crypto and storing in blockchain are then best steps we take about our money it gives profit for storing and ease for using at time of need.