The rise of digital currencies

It's no surprise by now that China has been making big moves towards creating their first digital currency backed by blockchain. After Libra announced their plans for their own currency for their 2b+ users banks have been very scared of what this could mean for them and their control. While China has been against the most known cryptocurrencies such as Bitcoin it has admitted to the power of blockchain, the way it can make transactions more efficient but most importantly the ease in tracking them.

The Digital Currency Electronic Payment or DCEP for short will be pegged to the chinese national currency (RMB) but unlike Alipay and other electronic payments which currently take up the majority of electronic payments in China, it will not require a bank account. Instead banks will create your digital wallets for you and you will be able to even send transactions offline as long as your phone has power. It will also have other advantages of current, old and almost obsolete payment systems such as SWIFT while making payment transmitters like Western Union, Paypal and many others completely useless. (If you haven't sold your shares of such companies, I would do that faster than I can front-run a burnpost.)

Even though they say that they will not be surveying what the customers spend their money on and not sell that data, it will not be completely anonymous to avoid illegal things such as money laundering, tax evasion and terrorist activity. If you want to believe the former it's your choice, but personally when I think about their recent movements in mass surveillance of their population and possibly social scores I find it hard to believe that they won't be tracking whatever they can and similar to current centralized giants use it to their advantage, either by selling the data to advertisers or other things.

China is not the only country making advantages towards creating their own digital currency, other countries such as Venezuela, Switzerland, Canada, Sweden and Russia are working towards this as well. (info taken from this video from the WSJ's youtube account which I recommend to give it a view as it talks about Chinas new currency.)

What may be one of the most important parts about this, though, is that each and every new currency will make these countries less reliable on the world reserve currency which as we know is the US Dollar. China and Russia have already been selling off their Dollar reserves for Gold and other commodities and it wouldn't surprise me if some of that money is heading towards cryptocurrencies either.

With this move into countries looking to blockchainize their own currencies or pegs thereof I believe it is only going to legitimize and validate current cryptocurrencies. Especially with currencies such as the Libra which will be open for anyone with a facebook account and KYC to use but with the disadvantages where only the rich who've had the opportunity to invest millions into become a BP/Witness will be the ones benefiting from it and other than that the restrictions and control they'll have on it to take someone's funds at any time or block transfers. This is going to interesting to see how it develops and I believe similar to Youtube or Facebook banning certain accounts in the past, if you give them a hand they will quickly take your arm. It'll start with some obvious, understood bans such as illegal activity but who knows where they'll draw the line, they know they have a lot of power and barely any competition so they will do what they want when they want. Unless more and more countries start creating their own crypto and similar to Swiss banks and their reputation people will want to keep their funds in those that give them the most advantages. Then one may think, instead of placing your money on stable currencies pegged to fiat, why not into currencies that can also appreciate in value and are deflationary in nature such as Bitcoin, Ethereum and Steem. (I want to talk about Steem, it's future and what it could be in combination with automation, but that for another post.)

I am happy that a cryptocurrency such as Steem had no ICO, no pre-determined witnesses and a platform that is open and transparent by nature but still allows it's users to remain anonymous if they so choose. One thing that's important here is that no witnesses are going to hardfork your account or not process your transfers no matter what you do. Of course for some minimal activity this will mean transactions of illegal nature but for the majority this will mean transactions without fear of being lost, blocked or confiscated.

The future thanks to this new trustless technology (Hail Satoshi) can be quite bright but in the wrong hands, such as pretty much every country and big corporations can quickly turn our future into a dystopian surveillance. It's in your hands to choose which side you'll be on.

Sources: 1, 2
Image Source: 1

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