Cryptocurrencies Are Already a Main Theme in Global Political Tables

It seems that the ongoing trade war between the US and China, not only affected directly or indirectly other economic titans such as Russia, Japan, and the broader European region, but it transformed into a whole new “currency war”, a term coined by the former Minister of Finance of Brazil, Guido Mantega.

Just as we used to worry about the price of Bitcoin and/or other altcoins while relying on the stability of fiat currencies, the later recently expressed unregular shifts in their respective prices. This is possibly due to reasons of inflation or international-scale tax policies, generated by political conditions such as the US-China trade war, which led to the devaluation of the Chinese Yuan into an all-time low first seen since the global housing-market crisis of 2008.

There are multiple factors indicating a high possibility that a global financial recession is on its way to hit the international markets, and this time probably even worse compared to its pre-successor crisis of 2008.

Interestingly enough, from G20 meetings to European Central Bank statements, there have been numerous mentions of Bitcoin and blockchain technology in high-level official talks regarding the future of the global economy.

Moody’s Investors Service, accredited rankings and policy research firm, recently announced they are positive blockchain standardization is coming by 2021.

“Standardisation would improve interoperability across systems and market participants, but also reduce counterparty concentration, operational and legal/regulatory risks for transactions that use blockchain technology,” says Frank Cerveny, an analyst at Moody’s.

In one of our previous articles, we examined Yves Mersch’s view on cryptocurrencies, who although a European Central Bank Official, believes a decentralized approach to crypto makes more sense and it is more transparent compared to Facebook’s Libra, which he characterized as a “Cartel-like” operation during his speech at the ESCB Legal Conference.

More recently, the head of ECB, Mario Draghi also expressed his concerns on the global currency “cock-fight” situation, citing that he is planning to stretch and test the current economic model we’re all blindly relying upon.

Sharing Elizabeth Warren’s angle, Draghi focuses on the euro and bond yields, practically showing us that we’re close to a global economic recession, as history wants the curve at low levels before each financial recession for the past half-century.

Besides ECB, IMF, and G20, more financial regulators including the FED, the Central Bank of Japan, and the Central Bank of Switzerland have scheduled meetings next week, focusing on how to “fix the slowdown” caused by the US-China trade war, affecting the global economy in unpredictable ways.

While China has devaluated the Yuan on its own accord, making Trump label the communist country as a “currency manipulator”, it has plans on releasing its own state-backed cryptocurrency which will be distributed by local tech giants starting on November 11th.

Russia, Japan, Switzerland, and the UK, are among the economic superpowers already discussing their own alternatives to a digital currency, criticizing Facebook’s Libra, while being skeptic about traditional cryptocurrencies such as Bitcoin.

Overall, the tensions between US President Donald Trump and Xi Jinping over who’s the “best country in the world” may have sparked a global discussion and policy re-evaluation of traditional monetary systems, but at the same time, it introduced cryptocurrencies into the big tables.

Whether it’s Bitcoin or not, it seems clear now, that blockchain technology is slowly being understood by the modern political system, and it undeniably has an important role to play in the shift of the global economy from being physical to digital.

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