Posted 2 years ago | by Ben Armstrong
A China Coin May Rock the Bitcoin Market
It looks like there has been a big change in how China looks at blockchain and crypto.
Following the call by President Xi Jinping to support blockchain and crypto in China, a global cryptocurrency exchange is planning to open an office in Beijing, reported by CoinDesk.
Now, in China, the government may launch a centralized crypto and has promised to approve blockchain companies. The new Coin China coin is allegedly called 'DCEP' (digital currency electronic payment).
A Real Digital Gold?
In a recent interview, market commentator Max Keiser gave information that DCEP would be backed by gold and this could be a big blow against the USD.
Just about anything could push the US/Global financial system into another crisis, and a new token that is used by the world's second largest economy for trade settlement is as good a reason as any for another global meltdown.
As reported by Bloomberg, China has bought 100 tons of gold since December this year. However, all reports about the Chinese coin DCEP, including official Chinese sources, have said that ‘China Coin’ is going to be backed by yuan, and there was not any word about gold.
Max Keiser has a long history of hyperbole, but there is no reason to think that China will ignore the power that gold has lent to monetary systems throughout recorded history.
In a situation where China's client-states have to choose between shortages of manufactured good, and angering the US empire, they are likely to pivot to whatever trade settlement method China will accept.
Peter Schiff’s Says Bye-Bye Bitcoin
Peter Schiff, CEO of Euro Pacific Capital, responded to Max Keiser’s information with a knock to Bitcoin. The investor thinks that if the China Coin ends up being backed by gold, the world’s most liquid metal, it will increase the price of gold and knock down Bitcoin.
His response on twitter:
According to @maxkeiser I'm an idiot because I think #gold is better money than #Bitcoin. He also claims China is about to launch a crypto currency backed by gold. This is bullish for gold and bearish for Bitcoin. A crypto backed by gold is much better than one backed by nothing!
— Peter Schiff (@PeterSchiff) November 1, 2019
The real story here is that the Middle Kingdom has made a 180 degree turn on how it views tokens, and may be working on the first Central Bank Digital Currency (CBDC). If China does decide to use gold to back the DCEP, Schiff may be correct on a big move in gold prices.
Bitcoin is a different story, and like anything in the token markets, there is no way to tell where BTC prices will be in a month, let alone a year. If there is a major problem with the US Dollar, BTC prices probably won't be the only asset that makes a moonshot.