Xi will attend a US-led virtual climate change summit on Thursday at the invitation of President Joe Biden – the first official meeting between the
Xi will attend a US-led virtual climate change summit on Thursday at the invitation of President Joe Biden – the first official meeting between the two leaders amid ongoing tensions. The summit will hear representatives from major economies including China, Japan, Russia, Canada, India, Australia, the UK and the EU on how the world will curtail its climate footprint. It comes after Beijing continues to clash with the West over a range of issues, from alleged human rights abuses, aggression in the South China Sea and the handling of the coronavirus outbreak.
But it is China’s economic clout over other nations that financial analyst Andy Hecht has warned about as Beijing is said to be on the cusp of a digital currency revolution.
He stated: “Digital currencies are the future. However, they create problems for governments that control the money supply.
“Money creates power, so central banks, monetary authorities and governments are not excited about this new asset class that seeks to replace money with a technological alternative.
“Still, it won’t be long before they capitulate and reach a happy medium by rolling out their own digital currencies.
“China looks to be the first country to do so, on the verge of a digital yuan, which fits right in with the Asian nation’s goal of domination for its currency as well as for the world’s second-largest economy and the largest population.”
Chancellor Rishi Sunak announced this week that the Treasury and the Bank of England (BoE) will examine the viability of a “digital pound” for businesses and households.
Dubbed “Britcoin,” it is aimed at tackling some of the challenges posed by cryptocurrencies such as Bitcoin.
The US and the EU are also looking at setting up digital versions of their currencies, but they are said to be years away from launching anything.
And Mr Hecht says that fits perfectly into Xi’s masterplan.
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He added: “President Xi Jinping plans to become the world leader.
“In 2014, the Chinese began working on a national digital currency, recognising the burgeoning asset class’s potential growth.
“Unlike the other cryptos, the Chinese version is on the cusp of being issued as a digital yuan or Digital Currency Electronic Payment (DCEP) controlled by the PBOC, the People’s Bank of China, the Sino central bank.”
The former trader warned that the US and the EU have their work cut out now.
He continued: “The US and European governments appear far behind China in embracing the currency market’s evolution.
“US Treasury Secretary Janet Yellen has called Bitcoin an extremely inefficient way to conduct monetary transactions. She has highlighted the digital currency’s use for illicit finance.
“Christine Lagarde, the European Central Bank President, has said that central banks will not be holding Bitcoin as a reserve currency and highlighted what she called funny business, stressing the rising need for regulations.
“What Secretary Yellen and President Lagarde did not say is that digital currencies are a direct challenge to the government’s control of the money supply.
“While the Chinese have recognised the technological transformation underway, the US and Europe have yet to embrace technology.
“The development of a digital dollar or crypto euro remains far behind China’s efforts.”
It comes after Bitcoin recorded the biggest one-day drop for almost two months last Sunday.
The retreat came after Bitcoin hit a record high of more than $64,000 (£45,773) last Wednesday following the stock market debut of the US’s largest exchange for the tokens, Coinbase Global Inc.
The cryptocurrency is now just under $55,000 (£39,747).
JP Morgan analysts have warned that if the bitcoin price doesn’t regain ground above $60,000 (£43,361) soon, bitcoin’s momentum signals will collapse.
Britain’s Financial Conduct Authority (FCA) has previously warned against investing in crypto.
It stated: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.