But lately, China has made it clear they're done learning. The student may soon become the teacher. That is, China is on a path to lead the world as the first country with true digital national currency.
While Venesuala's Petro is technically issued by the government, that nation's political issues stopped the Petro from being a functional currency used in the global market. Because the nations rejecting it would still be rejecting it whether it was a cryptocurrency or not, so we can't consider the Petro an example of how a national cryptocurrency would function.
One of my sources, an analyst within a well known firm in the blockchain space has had the Chinese government as a client for awhile now, but only lately have they stepped things up, he explained: "Actions accelerated last October when they wanted to know every possible outcome of replacing the renminbi with a cryptocurrency. Their goal being to reduce the costs inherent to issuance of paper money."
He continued, touching on their general sentiment currently "They seem convinced of the advantages of crypto, and still debating potential disadvantages. We're one of a few outlets providing a neutral 3rd party opinion.'
Looking in to what was happening publicly around this time in October, we saw the approval of a new law for the use of cryptography, and President Xi Jinping offered statements in favor of considering some blockchains central technologies for "important and innovative advances".
Why the sudden acceleration? China's Fear Of Facebook.
Everyone I spoke to that I consider an expert on China said the same thing - they looked at Facebook's plans for Libra, and went into panic mode.
Facebook and China have consistently clashed - they're very aware that Facebook is outside of their sphere of control.
"To them, the plans for Libra could have been presented by a US Government official and it would have been received the same - that's how they view Facebook. An American company, that tried to bring their platform to China but still wanted to follow US rules - not conform to China's" a contact who works inside a Hong Kong based crypto exchange told me.
There's a disaster coming if things don't change...
While Libra may have lit the fire that put China into overdrive, Facebook's fire here has been snuffed out by the US Government.
I'm no fan of Facebook, but I also never viewed Libra as a threat to other cryptocurrencies, if anything, it would serve as an easy first step into the cryptocurrency world, where people could get their feet wet. Libra users would soon wander deeper into the waters, having gotten over the initial fear of using cypto for the first time.
American politicians actions against Libra may end with a global coin that isn't bound to USD, but the Yuen instead.
The clips I've seen of elderly US politicians who clearly lack any basic knowledge of how cryptocurrencies work, grandstanding and flexing their authority to Zuckerberg on TV seem dead set on hauling Libra.
Meaning China could end up first to market with a big global cryptocurreny, while the US is at a complete stand-still.
Like it or not, the combination of Facebook, Instagram, and WhatsApp, and the ability to aggressively push the users of these apps to try Libra, is a shortcut to 'mass adoption' no one else can mimic.
I get not liking Facebook, but I don't get stopping them just to allow China to do it instead.
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Author: Adam Lee
Asia News Desk
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