Join 91,688 users already on read.cash

My Thinking is Biden's Fearful Dream DCEP

6 27 exc
Avatar for chrishoffman
Written by   45
1 year ago

Joe Biden, the new president of the USA, has been having a nightmare lately. No, in a nightmare, former President Trump does not come back after proving that the election was cheated. Or Biden's deputy, Kamala Harris, does not try to throw poison into his cola and kill himself and become president in his place.

Biden dreamed that the Chinese digital currency DCEP replaced the US dollar and became the world's reserve currency. The Fresh President was waking up in cold sweat.

Aside from the joke, Bloomberg said in a report that he based his name on sources that he did not reveal, that the Biden administration is worried that the dollar will lose its position as the world's reserve currency against the Chinese Yuan in the long run. According to the news; Various government agencies, such as the US Treasury Department, the Pentagon, and the National Security Council, are further working on Chinese electronic money.

According to the report, American officials are not concerned about the reserve status of the dollar in the short term. But fears are growing for the long run. Relevant departments collect information on whether the digital Yuan is operating in an environment that specifically imposes a trade ban, embargo or sanction.

I personally guarantee the American officials that it works. China and its allies are most faced with these sanctions barriers on the dollar.

If China is making a digital currency, of course, it will ensure that it works against sanctions just like Bitcoin. In this case, the power of the economic sanctions to be imposed by the USA on any country will of course decrease. In fact, as America's economic sanctions of a country can be overcome more easily through digital money, it will also push the target country towards China.

According to the Global Findex Database report 2017 data published by the World Bank, 1.7 billion people without bank accounts live in the world. According to another study called Tactical Reach Index published by Mastercard in 2019, approximately 1 billion people, 60% of whom do not have a bank account, reside in 15 countries and 607 million of them own a mobile phone. If we assume that this rate is valid all over the world, there are approximately 1 billion people who do not have a bank account but have a mobile phone. Most of these people live either geographically close to China such as Vietnam, Indonesia, Myanmar, etc., or live in countries such as Brazil, Mexico or African countries that China can easily influence economically.

Here, the first customer base to be targeted by the Chinese digital currency DCEP will be this large population segment, which mostly uses cheap Chinese mobile phones but does not have a bank account and therefore has not been integrated into the Dollar system. Of course, it is not a pleasant situation for the USA, which has been used to keeping the poorer countries under control with its popular culture, technology and most importantly, money. In this case, it is quite natural for Biden to fear DCEP.

However, can we think that the Chinese currency Yuan or DCEP will become the dominant reserve currency in the world instead of the dollar in the medium and long term?

In order for DCEP to become reserve money, it first needs a very deep borrowing, namely bond-bond market like America. Although difficult, China can establish such a market.

DCEP also has an important advantage in its love. Since the beginning of 2018, if China makes its oil payments in Yuan, it also guarantees to pay the Yuan owners in gold for these money, if they wish. In other words, the Yuan and DCEP, which is issued based on it, have a limited gold-backed currency feature, albeit vaguely. If China wishes, it can make DCEP constantly gaining value and gain an advantage over the unlimited and constantly losing structure of the dollar.

However, the most important obstacle for China will be political and cultural, not economic. No matter how much we criticize, America is still the main advocate of values ​​such as democracy and human rights in the world. On the other hand, China is already displaying an ultra totalitarian management approach with applications such as 24-hour surveillance of citizens with smart cameras and computers or filing citizens with social credit scores. You see, a businessman who does not like the administration is jailed on fabricated charges and sometimes even disappears.

China is willing to take this totalitarian understanding further with a centralized blockchain technology, in contrast to Bitcoin's decentralized blockchain. With digital, cryptocurrency DCEP, it intends to fully supervise all financial transactions of citizens. Although the Beijing administration claims that DCEP will be semi-anonymous, who can trust this type of regime with an obvious past on these issues?

The spread of the Chinese money will mean the spread of this totalitarian understanding. Of course, people would rather live under democracy than living in a digital concentration camp, with many aspects to criticize. America's greatest advantage in this struggle may be to protect and develop democratic values.

So what should the Biden administration do to avoid fearful dreams?

1- Avoid practices that will make the dollar even stronger by excessive spending and printing more money to close them.

2-It is not possible for America to struggle with China in the field of material production. It should give importance to political and cultural superiority such as democracy and human rights.

3-Washington should not block independent cryptocurrencies, especially Bitcoin, within the framework of democracy and human rights. Because although China makes DCEP slightly limited, it cannot allow the Yuan to be highly valued. Such a policy will make China's export difficult. When it has debts exceeding the size of the USA, it can neither tolerate an increase in interest rates nor an overvaluation of the dollar. However, although Bitcoin has great ups and downs, it will continue to gain value rapidly in the medium and long term. Both Americans and the world can ignore the economic advantages of DCEP only if they have access to all reserve assets such as Bitcoin, gold, silver, dollars and so on. America's and its allies' banning Bitcoin will actually push the whole world into DCEP's lap.

In fact, putting together the advantages and disadvantages for both sides, the result is that the dollar will gradually give up the world reserve currency throne. However, this position will not be filled by any other currency. Probably the world will have a multipolar and balanced reserve monetary system for at least a significant period of time.

Here, in addition to both paper and digital versions of national currencies such as Dollar, Euro, Yuan, etc., limited currencies such as Gold, Silver and Bitcoin will also have a very important place.

6
$ 4.57
$ 4.52 from @TheRandomRewarder
$ 0.05 from @leejhen
Avatar for chrishoffman
Written by   45
1 year ago
Enjoyed this article?  Earn Bitcoin Cash by sharing it! Explain
...and you will also help the author collect more tips.

Comments

Really it was very awesome nicely explained has been a lot of benefit to my understanding. I understood many things

$ 0.00
1 year ago

Really it was very awesome nicely explained has been a lot of benefit to my understanding. I understood many things

I am very pleased that it is useful for you.

$ 0.00
1 year ago

Thanks I will be waiting for your next more article ❤️❤️

$ 0.00
1 year ago

Thanks I will be waiting for your next more article

Yes, I am working on my article. I am doing my best to write the best for you.

$ 0.00
1 year ago

Go ahead ❤️❤️❤️

$ 0.00
1 year ago

Also, create your own sentences to get votes. Get votes from the Radom family.

$ 0.00
1 year ago