What is interesting about this is that people in crypto have been talking about this for many years, the difference is that replacing the US dollar as the world's reserve currency with a decentralized and publicly owned currency is seen as a good thing in crypto circles. However, I do not think that it will happen this way and even if the Chinese government does end up trying to use it for control, the decentralized nature of it gives all participants the ability to also move away from it. The value in Bitcoin is the value we give it and there are literally thousands of tokens on blockchains out there that could replace it, probably more effectively even.
It is interesting though, that such a joke as crypto is, is now being seen as a global threat, a weapon. I did predict quite a while ago, that it won't be too long until crypto users are seen as economic terrorists and there is no better way to do that than lump them in with an existing enemy, in this case, China.
It is more FUD, but the more it presents itself, the faster crypto will embed itself into society as while most people are quite economically naïve, people are starting to see through this kind of nonsense, designed to distract attention away from what is the real case at hand - economic empowerment of the masses of people who have been left disenfranchised by the very economy that the FUD is trying to protect.
But, what I find incredible is this. The entire crypto market cap is just over two trillion dollars and Bitcoin makes up 1.1 trillion dollars of that amount - yet the fear it could become the global reserve currency is already emerging in government circles. If there is ever a bullish sign on crypto, that has got to be it.
It is interesting to watch an industry emerge where a community of people can get together and generate value for themselves, to build an industry that is looking for inclusion and then - the governments and those in power positions try to cut it down.
And I think that this is what it comes down to - no matter all the pretty words people might say about wanting to make the world a better place for everyone, or the government spiel about improving conditions for citizens, unless they can simultaneously maintain control over those people, they do not actually want it. Any thing that threatens their powerbase, has got to be commandeered and if that is not possible, killed.
But the problem now arises, because while each seat of power wants to maintain control, they are also in competition with each other in a Games of Thrones'ian battle. How many countries on earth are content with the US dollar being the major global reserve currency, or if they could, would they prefer their own in its stead? If you want to do some easy reading on reserve currencies.
But just imagine - if instead of the reserve currency being owned by countries, the currencies were owned by the masses, meaning that the benefits of transaction would be distributed globally to all participants who are acting as Liquidity Providers for the entire world of trade.
In time, not only will crypto offer the most effective and efficient processes for global trade, it will also offer the healthiest return for the maximum number of people, as well as the security of decentralization so it doesn't get hijacked, and the additional security through the ability to fork or replace if it does.
The thing is, no one in a position of power wants any kind of security that limits their own usage of their power, that limits their ability to make manipulate money and markets in order to control more.
Who knows, perhaps Bitcoin is a "Chinese financial weapon" - but crypto in general is not, though it is a weapon of economic destruction. The capabilities of crypto are just starting to emerge, but they go far beyond making it possible for some people to buy a Lambo, it is going to replace the entire economy as we know it.
Wealth is going to continually shift over from the traditional mechanisms to the blockchains, creating increasing stability in the new and increasing volatility in the old. New businesses are going to emerge that generate wealth and distribute it to more people, meaning local conditions and opportunity will improve and eventually, the global economy of supply and demand will be serviced by decentralized networks of strangers in a trustless community.
Crypto has the potential to shake the current economy to its core and prove not only how inadequate and manipulated it is, but give an alternative that replaces it completely. It will destroy - but it will also rebuild stronger.