We must clarify the main direction. Increase investment focus on a number
of key core technologies and accelerate the development of blockchain technology
and industrial innovation. So said, Chinese president Xi Jinping on October
25th as he challenged the country to quote, sees the opportunity of
blockchain technology. As a result, blockchain has been all over Chinese
media following these remarks with search volumes for keywords related
to blockchain, spiking
on Chinese search engine, Baidu and messaging app
we-chat after the speech. And of course this has been reflected
positively on the crypto market with many in this space jumping the gun and
saying that this is the catalyst for blockchain innovation and
adoption, but why, why now? What is driving it and how does China
aim to use blockchain to fulfill their larger goals? Welcome to ready set crypto. This is your brain on blockchain [inaudible]. So here at ready say crypto, we’re all about high quality
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use the code BTC 10 K to get 10% off. Now with regard to China, I can’t help but notice the star contrast
between how China talks about FinTech and how the U S talks about FinTech. The U S Congress on both sides of
the aisle have shown that they crave self-serving media coverage
before election season. Over understanding the trends and
technologies shaping America’s financial future, just as European union has bypassed
the United States on data protection. China is already making serious headway
in FinTech innovation and blockchain adoption. This will be the space race
of our generation and this
isn’t just a top down two juggernauts, two superpowers duking it
out for innovation. It’s also bottom up. People around the world are becoming
more vocal about their displeasure when they feel like they’re
being taken advantage of. The proliferation of the
internet connected devices
and social media platforms have fueled uprising after uprising
in areas like Hong Kong, chili, Turkey, Venezuela,
Argentina, Ecuador, Lebanon, et cetera. It’s clear that people of the world
are looking for systems that better represent them and give them access to
the tools of the modern world and that’s exactly what FinTech represents. Building systems that better work
for the people, by the people, but even on the macro scale, there’s
many efficiencies to be made as well. The U S China trade war now has a new
battleground after focusing on agriculture imports, exports, technology,
patent infringements, and spyware. The new focus is now squarely on FinTech
and that’s exactly why she shouldn’t ping fired off these Salvos of charter
to his country around blockchain innovation and the larger
FinTech initiative. Two days after Mark Zuckerberg was hauled
in front of Congress and eviscerated for many hours with many of the questions
being off topic or not related to Libra, the Chinese government passed a
new cryptography law stating that clear guidelines and regulations are needed
to evaluate commercial cryptography technologies used in the major fields
related to the national interest as the current lieu system is not
suitable for the industry anymore. Going even further, a Chinese official said that Facebook’s
digital currency Libra will not be successful. In contrast, China’s central bank is close to
developing its blockchain based financial technology, the digital Yuan, and it will be the first in the world
to officially roll out a usable digital currency. He stressed that the cross
border liquidation of
China’s Renon be its currency is highly dependent on the
U S Swift and ship system. He stated Swift is an outdated,
inefficient and costly payment system. Since the establishment
of Swiss 46 years ago, the technology has been updated slowly
and the efficiency has been relatively low. International wire transfers usually take
three to five business days to arrive. Large remittances usually require paper
documents which presents additional difficulty for processing large
scale transactions efficiently. At the same time, sift usually charges a fee of one
10,000 of the settlement amount and has obtained huge profits by virtue of the
monopoly platform. Make no mistake, China is getting into blockchain and the
underlying technology of triple entry accounting is likely to lay
the foundation for automation, which stands to be the
most disruptive innovation. Since the internet quite simply, there’s no putting the genie
back in the bottle and for China, the benefits are very clear from their
comments about the Swift network and ships and their digital
currency, the digital Yuan. It’s clear that they want to be the
new power broker as it relates to the international monetary system
to facilitate the transaction
and settlement layer of the new digital economy. If the U S is not willing to step up
to the plate for FinTech innovation, China is more than willing to fill the
power vacuum and while we have the crypto community might celebrate a price increase
and the overall market looking green. We have to remember the
ulterior motives that China has. It’s already quite obvious that
China intends to use blockchain, the digital Yuan to prevent capital
flight from its country and to increase surveillance and control over
its population. As I often say, technology is not good or evil. It is the amplifier of intent and China’s
intent in this regard is quite clear. They’ve said for some time that they’re
ready to roll out the new digital Yuan as early as November 11th singles day, which is the biggest
shopping holiday in China, and I would not be surprised at all if
they begin to link the digital Yuan to the social credit score system
that’s already been rolled out. Chinese citizens have already
been indoctrinated into
a consumer score as well through the apps WeChat or Alipay, unlike the FICO credit score
we use in the United States. This is something seen as a status symbol
in China and it already allows Chinese citizens to get better
rates on apartments, loans, or even something as simple as having
a free power charger provided at a restaurant because of their good score
at digital Yuan will better control Chinese citizens and allow China to
export its version of control worldwide. We’ve seen that be the case in the past
couple of weeks as even us companies are afraid to speak out against China for
fear of being blacklisted by the country and ineffective us companies have to
swear allegiance to a foreign power in order to not affect their bottom line. Chinese officials are already playing
with the idea of using blockchain as a means to swear allegiance to
the Chinese communist party, but regardless of FinTech, innovation is the battleground right now
in China is decidedly pulling away to really emphasize that. Think about some of the things that I
brought up regarding China in this video and compare that to FinTech innovation
in the States and the news that we see around that. The big news out of the U S yesterday
was that backed was going to be launching a consumer app and I ask you, will this really move anything more than
a percentage of a percentage in terms of adoption? I don’t really think so. I think it’s time for us regulators
to step up to the plate and work with innovation platforms even such as
Facebook to move FinTech forward or we’re going to be left behind. Do not be so willing to accept that China
is moving into blockchain because they fundamentally have a different
interpretation of what
blockchain is and how it can be utilized versus the
vision and the Genesis. You see in the Bitcoin white
paper, blockchain should
enable us to be more free, not utilized to better control
us. So what do you think? What’s your on China moving
into blockchain? Do you
think the U S can catch up? Let’s discuss in the comments below
and as always, thanks for watching. I’ll see you in the next one. Cheers.