China

China Is Drafting Laws for the Circulation of National Digital Currency

26/03/2020 by Idelto Editor

Amid the coronavirus pandemic, China’s central bank has reportedly completed the basic development of the nation’s central bank digital currency. The central bank is now drafting legislation for its circulation, according to local media. A number of patents have revealed what the digital yuan will be like.

Also read: 2x Bitcoin — Wanna Double Your BTC to the Moon? Forget About It

Coronavirus Pandemic Could Accelerate the Launch of China’s Sovereign Digital Currency

China’s central bank, the People’s Bank of China (PBOC), is reportedly closer to issuing its own digital currency, Chinese publication Global Times reported on Tuesday, citing an unnamed industry insider. The central bank, in collaboration with private companies, “has completed development of the sovereign digital currency’s basic function and is now drafting relevant laws to pave the way for its circulation,” the publication detailed. The insider elaborated:

As more central banks around the world are cutting interest rates to zero or even entering negative territory to release liquidity into the market amid the coronavirus (covid-19) pandemic, China should accelerate the launch of its digital currency.

The next step “involves digital currency legislation and working with banking and insurance regulators on supervision,” the insider noted, adding that this step “could be more lengthy” and “poses uncertainties for the exact date of the launch.” Cao Yan, director of the Advanced Research Institute of Blockchain under the Yangtze Delta Region Institute of Tsinghua University, believes that the PBOC “should accelerate the launch of its digital currency in the face of the unprecedented coronavirus pandemic,” the publication conveyed.

China’s central bank, the People’s Bank of China (PBOC), has reportedly completed the basic development of the central bank digital currency. The bank is now drafting relevant laws for the circulation of the digital yuan.

The PBOC started researching the possibility of launching its own CBDC in 2014 with the aim “to cut the costs of circulating traditional paper money and boost policymakers’ control of money supply.” In August 2019, Mu Changchun, deputy director of the central bank’s payments department, said that the digital yuan was “almost ready.” However, Governor Yi Gang later clarified that there was no timeframe for the launch and more time was needed for further research, testing, trials, assessments, and risk prevention.

Central bank officials explained that the CBDC will use a two-tier system where both the central bank and financial institutions will be legitimate issuers. Mu detailed that it would not be a cryptocurrency like bitcoin or a stablecoin, adding that the central bank has “completed the top-level design, standard formulation, functional research and development, joint debugging and testing.”

Patents Related to China’s Central Bank Digital Currency

A large number of patents have reportedly been filed relating to China’s central bank digital currency. The PBOC is said to have filed 84 patents relating to its plans to launch a digital yuan, as news.Bitcoin.com previously reported.

According to Global Times, a number of private companies participated in the development of China’s digital currency, including Alibaba, Tencent, Huawei and China Merchants Bank. Alibaba’s payment platform, Alipay, publicized five patents related to China’s CBDC between Feb. 21 and March 17, the news outlet detailed, adding:

The patents cover several areas of digital currency, including issuance, transaction recording, digital wallets, anonymous trading support and assistance in supervising and dealing with illegal accounts.

Many patents filed by the PBOC and Alipay revealed the nature and scope of China’s central bank digital currency.

The first patent, entitled “Implementation and Electronic Equipment of CBDC transaction,” was publicized on Feb. 21, the 8btc publication reported, asserting that by filing this patent, Alipay likely plans to participate in the second issuance in the national digital currency’s two-layer structure alongside commercial banks.

The next patent, revealed by Alipay on Feb. 25, was entitled “A Digital Currency Account Control Method and Device.” It indicates that “If regulators want to restrict illegal transactions, they need to go through the bank’s currency operating agency when illegal activities have occurred and it’s very difficult to recover the transferred fund,” the publication described.

Another patent, publicized on Feb. 28, was called “Digital Wallet’s Method and Electronic Device.” It discusses many types of digital wallets for different services. The next patent revealed by Alipay on March 17 was entitled “An Anonymous Trading Method and System Based on Digital Currency.” It details a system that uses temporary passwords for anonymous transactions.

Do you think China will be the first country to launch a central bank digital currency? Let us know in the comments section below.

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World’s Largest Banks Losing Stock Value During Weeks Marked by Pandemic

25/03/2020 by Idelto Editor

The spreading coronavirus infection is taking a toll on the global economy and traditional financial institutions are already hurting. The world’s largest banks have seen their stocks losing value over the past weeks and months while facing cash withdrawal pressure and preparing to deal with a shrinking asset base.

Also read: US Cash Crisis: Withdrawal Limits Spark Bank Run Fear

China’s ‘Big Four’ See Their Stocks Tumble

No one has a clear idea where this is going or what comes next for the planet’s financial system. What’s obvious, however, is that some of its elements are already under stress. Reports of banks imposing withdrawal limits in parts of the U.S. indicate a cash crisis is brewing. New interest rate cuts, more money printing and the flight of capital towards assets they don’t manage, such as cryptocurrencies, are going to limit the value banks have under their control.

China, where the covid-19 outbreak started, is home to the world’s largest banking sector in terms of assets. In mid-2019, the official figure stood at over $40 trillion, despite liquidity problems with some small regional banks and a credit crunch on the interbank market that required intervention from the People’s Bank of China. The big four state-owned commercial banks, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China, are topping the 100 largest banks list, according to the latest edition of the S&P Global Market Intelligence report.

These financial behemoths have been watching the prices of their stocks drop over the last few months. From this year’s high of 6.01 yuan (approx. $0.85) in early January, ICBC shares are now trading at a little over 5.10 yuan ($0.72), and CCB stocks dropped from 7.49 yuan ($1.06) on Nov. 7 to a low of 6.17 yuan ($0.87) this past Monday, before bouncing back to 6.37 yuan ($0.90) on March 25.

The shares of the other two major Chinese banks also lost value, especially during the last month as authorities were struggling to contain the spread of the deadly coronavirus and deal with the economic fallout of the epidemic. Japan’s Mitsubishi UFJ Financial Group, another Asian banking giant, saw a steep decline in the value of its shares, from 566 yen ($5.08) on Feb. 21 to 384 yen ($3.45) on March 19. Its shares are currently trading for around 450 yen ($4.04).

Western Banks Affected by the Spreading Virus

The last several weeks brought similar results for the leading banking institutions in the United States, which now has over 50,000 confirmed covid-19 cases. JP Morgan’s stock fell to $79.03 from $137.49 per share on Feb. 20. Bank of America shares dropped from a monthly high of close to $33 to around $18 on the first day of the week before rising back to around $20 on Tuesday, when stock markets reacted to the Federal Reserve’s latest announcement. The Fed pledged to an open-ended quantitative easing in response to the economic challenges posed by the epidemic.

Other banks that have been hurt by the crisis which led to a slowdown in economic activity around the world include the European HSBC and BNP Paribas. The shares of the London-based investment bank and financial services holding company, which were selling for over $35 about a month ago, started this week at a little over $28. Paris-headquartered BNP Paribas saw its stocks plunge by almost 50% to €25.43 ($27.40), from €48.70 ($52.69) on Feb. 25. Deutsche Bank’s shares registered similar losses, dropping from close to €9 ($9.74) in late February to a monthly low of under €5 ($5.39) in mid-March.

What do you think of the world’s leading banks losing stock value? Tell us in the comments section below.

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Market Update: Bulls Return, 120 Million Tethers Minted, Bitcoin Halving Looms

20/03/2020 by Idelto Editor

On March 20, cryptocurrencies jumped in value erasing some of the losses that took place over the course of the market carnage last week. The entire cryptoconomy gained a quick $39 billion during Thursday and Friday’s trading sessions and global trade volume has spiked significantly as well. As the coronavirus outbreak has been pushing investors worldwide toward hard cash, BTC gained 11% and BCH jumped 18% during the last day.

Also read: The 35 Most Influential Bitcoiners Dominating Crypto Twitter by Follower Count

Crypto Prices Push Higher, Erasing Some of Last Week’s Losses

Digital currencies are showing some resilience during a worldwide pandemic that has triggered a turbulent economy in every nation. When cryptocurrency trading sessions started during the early morning hours of March 19, BTC was swapping for $5,300 per coin. Since that point, however, BTC prices started gradually moving northbound and by 8:30 a.m. EST, BTC was trading for $5,600. By 2 p.m., the digital asset touched a high on Thursday reaching $6,400 per coin.

At the time of publication, the crypto asset is trading for $6,590 per BTC and the coin’s market capitalization has crossed over the $120 billion mark once again. BTC statistics show the crypto is up 11% for the last 24 hours and up 18% for the week.

Behind BTC, is ethereum (ETH) which is swapping for $143 per coin and has gained 11% today. XRP is trading for $0.16 per token on Friday, gathering 7% in gains since yesterday. The stablecoin tether (USDT) still holds the fourth market cap position on Friday as well.

Bitcoin Cash (BCH) Market Action

Bitcoin cash (BCH) commands the fifth largest market valuation and each coin is swapping for $230. BCH has gained over 18% in the last 24 hours and the coin is up 30% for the past seven days. This has given bitcoin cash an increase of 23% in 90 days’ time and 49% up for the last 12 months. At press time, the top trading pair with bitcoin cash is tether (USDT) commanding 65.8% of trades followed by BTC capturing 15.9% of BCH swaps. USD (9.8%), KRW (3.6%), EUR (1.5%), and ETH (1.3%) command the positions below USDT and BTC respectively. Right now, like most cryptos in the top 10, BCH is battling heavier resistance at the $245 region after gathering more gains on Friday.

120 Million Tether

During a morning note to investors, Etoro’s Simon Peters commented on how BTC has rebounded significantly over the last 24 hours. Meanwhile, Tether Limited, the firm that issues USDT, has minted 120 million tethers and Peters thinks it might make traders believe a big move is coming.

💵 💵 💵 💵 💵 💵 60,000,000 #USDT (59,982,680 USD) minted at Tether Treasury

Tx: https://t.co/EdhlIIfg4q

— Whale Alert (@whale_alert) March 18, 2020

“In the last 48 hours over $120 million USDT has been minted. Tether said this was just an ‘inventory replenish’ that had not yet been issued onto the market. But as this information is publicly available on Twitter, it’s likely that speculators are already starting to jump in because they feel a big buy order may be coming,” Peters said. Despite the gradual increase in price on Thursday and Friday, Peters highlighted that the bears could still bring the price down again.

“It will be interesting to see if demand continues to increase over the days to come and whether we start seeing some more prominent ‘higher highs’ and ‘higher lows’ in price action,” Peters noted. “This would give me more confidence that a recovery is on the cards. But we’re not out of the woods yet.”

Venture Capital Deals in Blockchain Continue But Saw Steep Decline in 2019

A new study from CB Insights details that in 2019 crypto and blockchain startups didn’t get as much funding as they did the year prior. According to the research, venture capital (VC) deals declined in 2019 by 34% from 2018’s $4.2 billion to around $2.8 billion last year.

Despite the year-over-year decline, 2019 was roughly 120% higher than 2017’s $1.2 billion in VC deals. “I don’t think funding [volume] drops are indicative of the health of the industry. … A lot of younger companies are raising rounds,” an analyst at CB Insights, Alex Kern, noted. “Larger, more mature businesses didn’t come back for more capital.” CB Insights also highlighted that VC deals are steadily moving from the West to the East. Kern wrote:

In 2015, 51% of deals were for US-based companies while only 2% went to China-based companies. In 2019, the US’ share of deals fell to 31% and China’s rose to 22%.

Cryptocurrency Rally Outpaces Traditional Stock and Commodity Markets

Digital currencies have outperformed fiat currency markets alongside stocks, bonds, equities and commodities during the last two days. For instance, the U.S. dollar has slid to the lowest levels since 2016. Thursday’s stock markets saw some slight gains and stock futures before the opening bell on Friday indicate a rally is in the cards.

Even though traditional global markets have seen some relief they haven’t performed nearly as well as BTC. Denis Vinokourov the analyst from Bequant noted that there were a few different factors to consider. “A combination of factors is driving the market higher,” Vinokourov said. “[Like] profit-taking flow in the options market.” Vinokourov continued:

While bitcoin may have been trading in lockstep with risk assets and in particular S&P 500, it is not the first that the digital asset has established some degree of correlation to traditional assets — Every time, this correlation proved to be short-lived.

Overall, traders are curious about whether or not the current crypto rally will hold or if this is simply a ‘dead cat bounce.’ For now, optimism is in the air but speculation and skepticism about the future of crypto markets going forward continues. So far, with all things considered, cryptocurrency market prices have remained resilient during one of the biggest market crashes in history. While weathering the storm, crypto proponents are also waiting for the BTC and BCH halvings. Bitcoin Cash (BCH) is scheduled to halve in 18 days on or around April 8, and BTC will face a network halving in 53 days on or around May 13, 2020.

Where do you see the cryptocurrency markets heading from here? Let us know in the comments below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Cryptocurrency and stock prices referenced in this article were recorded on Friday, March 20, 2020, at 9:45 a.m. EST.

Images via Shutterstock, Trading View, Bitcoin.com Markets, Twitter, Skew analytics, Fair Use, Pixabay, Bakkt Volume Bot, and Wiki Commons.

Want to create your own secure cold storage paper wallet? Check our tools section. You can also enjoy the easiest way to buy Bitcoin online with us. Download your free Bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

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China’s Changing Perception of Bitcoin: Bitkan CEO Shares Insights After 7 Years in Crypto Industry

20/03/2020 by Idelto Editor

Since the advent of bitcoin in 2009, cryptocurrencies have gone from being a niche topic for tech nerds to ubiquitously recognized — if not always understood — staples of modern finance. Bitkan CEO Liu Yang recently took some time out to give news.Bitcoin.com a peek into the Chinese bitcoin community and its changing ideas and perceptions of crypto, throughout Bitkan’s seven years in the business. Though general narratives have changed and evolved, and the recent covid-19 crisis impacted markets, the CEO says that overall China is still bullish on bitcoin.

Also read: Tether Launches Stablecoin Token on Bitcoin Cash via Simple Ledger Protocol

Following Bitcoin, Forming Bitkan

An integrated platform for multiple crypto services, Bitkan was launched in March 2013 by former members of China tech giant Huawei‘s R&D department. CEO and co-founder Liu Yang was head of the Huawei Wireless Technology R&D department at the time, leaving to pursue business in crypto when, according to Bitkan, “most people saw Bitcoin as a Ponzi scheme.”

“Bitkan started out as a geek product,” the company told news.Bitcoin.com. “The actual time that Bitkan was created was back in December 2012. At that time, most of the major exchanges for bitcoin geek players in China were all from abroad, hence Chinese bitcoin community users need some market alerts tools to facilitate price monitoring.”

After launch in 2013, the Bitkan platform grew to be a hub for market data, and an OTC and aggregated trading platform with an active community.

Chinese Community’s Perceptions of Bitcoin Change, OTC Trading Remains Popular

According to CEO Yang, bitcoin was initially a point of general intrigue for Chinese, but soon “went from being an item of curiosity to becoming deemed a Ponzi scheme by the Chinese community.” From there, the perception evolved. Yang elaborates:

Towards the end of 2014, everyone began to focus their attention onto blockchain technology. After the ICO wave in 2017, Bitcoin was characterized as a revolutionary digital currency. After the madness at the end of 2017, people have generally heard of Bitcoin. The common man is still rather wary of cryptocurrency while some people regard Bitcoin as the best digital investment product.

When it comes to China’s legal restrictions on the crypto industry, and OTC trading in the country, Yang told news.Bitcoin.com there will always be a demand.

“I would say that there is always a demand for OTC trading. Due to restrictive legislation on exchanges, the need for OTC will continue to exist to satisfy investment and trading needs. Thus, after regulations, OTC transactions will inevitably develop more vigorously than before.” Yang makes a small caveat: “However, from the perspective of the entire crypto market, I would say that the number of users are declining as a whole. This is due to regulation and the price of bitcoin.”

Covid-19 Crisis and Ensuing Market Slump

“I think the financial crisis has arrived. In other words, we are already caught in it,” Yang asserts.

Incidentally, the financial crisis this time is not quite the same as the financial crisis of 2008. This time, as the epidemic situation worsens, many production lines and commerce have stagnated. This may cause a more significant harm to the markets.

Noting government efforts to stem some of the economic carnage, Yang details: “From China’s $7 trillion planned infrastructure spending to U.S. interest rate cuts and the $400 billion plan to boost their economy to protect their businesses, we can see that global governments will likely take steps to save the markets.”

Workers at a factory in Jiujiang, China.

He also notes that some Chinese see the covid-19 crisis and ensuing crypto market plunge demonstrating “a certain degree of correlation between bitcoin and gold” as they have not appeared to follow the S&P stock market index in more recent events.

“We can see that the [crypto] price slump this time happened after the plunge of the U.S. stock market and crude oil,” he elaborates. “Likewise, it has also led to gold to fall as well. This morning (March 19), the S&P 500 circuit breaker occurred for the fourth time this month. However, gold did not fall together with the index and neither has bitcoin.”

Yang views the recent plummet in crypto prices as “a rapid deleveraging process” which will ultimately help crypto. “In the long run, it is conducive to the long-term development of cryptocurrencies. After this plunge, the development of cryptocurrencies will be more healthy and positive.”

Despite a Rough Start to 2020, China Still Bullish on Bitcoin

Challenges of the new year notwithstanding, Yang says that “when there is a crisis there are opportunities,” and “While some older traditional businesses may fall, at the same time, new business models may arise … the epidemic in China has actually accelerated the rise of e-commerce, remote working, online education and many other industries that were not that popular before.” He also predicts good things for bitcoin’s price, detailing:

I think that this round of decline is the result of the leverage effect in the crypto market, and it needs to burst its bubble. There will still be some fluctuations, but all in all the market is likely to have a strong recovery within a year, and is very likely to exceed the previous all-time-high.

Bitkan’s goal into 2020 remains to make crypto investment easier by way of a “one-stop crypto investment platform,” the CEO notes. As for China, Yang maintains that there is a marked difference between speculators and investors, the latter typically remaining steadfast through storms while some of the former peel off in defeat, and summarizes: “Although the view of the Bitcoin community in China is still relatively fragmented, the overall voice of the community is still bullish as it is currently in a period of severe volatility.”

What is your perception of bitcoin currently, amidst the crisis? Let us know in the comments section below.

Images courtesy of Bitkan.com, Shutterstock, fuyu liu, humphery, Joinmepic, fair use.

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Disney World Economics: How Coronavirus Could Be Used to Justify a Global Financial Reset

13/03/2020 by Idelto Editor

‘What in the world is going on’ has now become a question of real pertinence, instead of just a cliché for common bewilderment. As COVID-19 panic grips the world, ripple effects are crashing markets and effectively canceling economies across the globe, scrawling the writing on the wall for something big. Even the beloved Walt Disney World has announced it will close its doors for the time being. It stands to examine then, whether there is substance to the idea that the ‘world grinding to a halt’ could be used to implement a new financial paradigm. One that is digital, surveillance-based, and most importantly, covers the economic sins of unsustainable times past.

Also read: Gold and Bitcoin Markets Tested, While Central Banks Try to Quell Stock Market Rout

Corona: The Favored Virus of ‘the Crown’?

Recent news of Disney shutting down brings attention to another ‘magic kingdom’ — the whimsical endless credit monarchy of Keynesian recklessness. It too appears to be reaching a terminal impasse. There is speculation the COVID-19 pandemic could be the perfect opportunity for the world’s financial planners to cover their past sins of mega bubbles, unsustainable inflation and debt creation, wiping the slate clean — this time with a decided focus on digital surveillance, control, and unmitigated printing powers, using the disease outbreak as a convenient scapegoat. But is there any substance to such conspiracy talk?

In the interest of avoiding tinfoil hat, baseless assertions when looking to the future here, it’s best to understand what has already been established on the world economic scene prior to the outbreak of COVID-19. A few major facts to bear in mind:

The global economy was running out of options for dealing with recession, as major economies headed closer and closer to, or further beyond, the zero bound, engaged in massive stimulus, and continued to create artificial credit bubbles.

Central Bank Digital Currencies (CBDCs) were actively being developed and researched, and China’s version — the digital Yuan — is already complete and in testing phases. Financial policymakers around the globe have been noting the utility these could have for forcing monetary policy on individuals, where physical cash enables them to evade such things as negative interest rates in banks.

Fewer and fewer people were expressing confidence in state authorities and their respective central banks. Political unrest — much of which was concerned with economic policy — was manifested in unprecedented fashion via demonstrations worldwide. Decentralized cryptocurrencies like bitcoin were increasingly viewed favorably by a significant segment in the context of centralized corruption, worldwide bailouts, and distrust of leaders, even on mainstream media outlets.

With the above in mind, it is interesting that the outbreak of this novel coronavirus has resulted in a worldwide panic drowning out these factors, prompting even the doubtful to once again encourage their peers to trust the state for leadership. This is not to assert that the virus isn’t a threat, or that regulators “planned” its release. It is simply to note that politicians and financial planners have historically leveraged such situations to implement new — and often highly intrusive and unethical — policy, and openly admit to doing so. At times, even desiring disaster. With this knowledge at the forefront, it becomes understandable some are connecting the dots.

Leveraging Catastrophe: Nothing New Under the Sun

At the outset of the last major financial downturn in 2008, then Chief of Staff for President Elect Barack Obama, Rahm Emanuel, stated at the Wall Street Journal CEO Council in Washington, D.C.:

You never want a serious crisis to go to waste. And what I mean by that, it’s an opportunity to do things that you think you could not do before.

Emanuel went on to note that in virtually every area of governance, major crisis provides opportunity. Opportunity for regulators to make bold moves in implementing otherwise controversial policy. “This is an opportunity, what used to be long-term problems, be they in the health area, energy area, education area, fiscal area, tax area, regulatory reform area — things that we had postponed too long that were long-term are now immediate and must be dealt with.

This crisis provides the opportunity for us … to do things that you could not do before.

Much like the panicked speculations of today, Emanuel’s prescription was not merely for one area of reform, but a system-wide overhaul. And much like today, the choice as to what policies are implemented does not involve the common individual. The “opportunity for us” to do things is just that. The “us” does not include you. Central bankers and financial planners concur, and have been wanting to take various economic measures for decades. Now could be their newest and biggest chance to date.

A paper published by the European Central Bank in January notes the potential benefits, perceived by some, of government-approved CBDCs:

By allowing to overcome the zero-lower bound (‘ZLB’) and therefore freeing negative interest rate policies (‘NIRP’) of its current constraints, a world with only digital central bank money would allow for – according to this view – strong monetary stimulus in a sharp recession and/or financial crisis.

“This could not only avoid recession, unemployment, and/or deflation but also the need to take recourse to non-standard monetary policy measures which have more negative side effects than NIRP.”

The publication also details there is an existing argument for CBDCs to make drops of “helicopter money” to the populace much easier. Further, “A number of authors have argued that CBDC widens the range of options for monetary policy, essentially since variable interest rates on CBDC would provide for a new, non-redundant monetary policy instrument that would allow improving the overall effectiveness of monetary policy.” In other words, no more hiding from negative interest rates by taking your money out of banks. When the cash is digital, and centrally controlled, interest rates can be applied directly to the supply.

Some examples of recent quotes, prior to the COVID-19 crisis, from policy makers and economists may present the picture more clearly:

At the current stage, the central bank’s major goal of issuing digital currency is to replace the physical cash.

If everyone is holding cash, negative interest rates become useless.

-former People’s Bank of China (PBOC) governor, Zhou Xiaochuan

Let’s tax cash holdings, simple as that: we’re back to monetary policy as usual; people are disincentivised to be holding large lumps of physical cash; they are having to think harder about putting money to work.

-New Zealand Reserve Bank Governor, Adrian Orr

My personal conviction is that given the developments we are seeing, not so much in the bitcoin segment, but in the stablecoins projects … we had better be ahead of the curve if that happens. Because there is clearly a demand out there that we have to respond to.

-European Central Bank (ECB) President, Christine Lagarde

Since the 2008 crisis, we did not solve a single problem. We lowered the interest rates to a record low level and we flooded the world with cheap money. The central banks created one financial bubble after the other and now we have the biggest bubble in history.

Trillions of dollars spent to solve the problem just created a new mess, a bigger bubble and when this one bursts, 2008 will look like a kindergarten. This one will be epic.

… central banks will issue CBDCs and they will control us all, seize our freedom and wealth. They need negative interest rates and they can only achieve that when the fiat money moves into the digital world and they abolish paper money.

-German-based author and finance strategy consultant, Marc Friedrich

Even so-called conservative U.S. President Donald Trump has been clamoring for negative rates as the Federal Reserve injects new money and credit into the American economy recklessly. Trump said in January: “Meaning they [people in negative rate countries] get paid to borrow money, something that I could get used to very quickly. Love that. Gotta pay back your loan? No. How much am I getting?” This is the level of fiscal insanity that now qualifies as leadership.

The Bubble Is Bursting Right Now, Worldwide — Why Isn’t Bitcoin Being Adopted?

There is a lot to take in. A deluge, really. The world populace is overwhelmed with understandable fear and panic, and a tsunami of conflicting information from governments and media. The virus is the new plague, but tests are not being made available in many places. Trust the official stats and follow political leaders, but these stats are incomplete without tests, and some political leaders, like Donald Trump in the U.S., don’t even get tested. China’s censored medical media is of course not to be trusted, either.

Flights, public schools and large gatherings are banned, cancelled or closed. No NBA, no SXSW, no Disney, overwhelmed hospitals. Global markets are in sharp and rapid decline, plunging past historic lows, with the ripple effect from so many major industries grinding to a halt sure to be felt much more painfully in months to come. Italy is suspending mortgage payments. Ireland offering pay for those out of work sick. To compound the disaster, martial law — as being experienced in China — appears to be on the horizon, even for Western countries.

Crypto is also suffering, not looking currently to be the store of value its proponents had claimed. This is not to say bitcoin isn’t a more sound money than government fiat, though. There is a reason policymakers are not promoting bitcoin and crypto as sound means to salvage the world economy now. That would make them pay, and they’d have to feel the very real pain from the death of the monstrous bubble they’ve created, via endless printing and debt creation for centuries. As the International Monetary Fund blog maintained in February:

Severe recessions have historically required 3–6 percentage points cut in policy rates. If another crisis happens, few countries would have that kind of room for monetary policy to respond.

In short, the only way to beat this thing is to erase the debt record. Down the memory hole. But they still depend on you and I to support them, as these “leaders” are generally not producers, but parasitic in nature. Bitcoin makes this difficult for them. When you own the private keys to some bitcoin, you don’t have to pay anybody. This is why the stuff has been smeared as criminal over and over again, and CBDCs will likely be ushered in. For the rulers of the world, when the game isn’t going their way, they don’t try to improve — they just push reset.

Do you think the pandemic signals a global financial reset? Why or why not? Let us know in the comments section below.

Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

Images courtesy of Shutterstock, Adriana Iacob, fair use.

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