China's president Xi embrace blockchain while Libra struggles to get regulations approvals. Read more about how Bitcoin and the cryptocurrency market reacted to recent news.
his weekend has seen dramatic changes in the bitcoin price, with the peak reaching $10,500 BTC/USD. Reeling from lows in the last month, this was the highest level BTC has traded for since September 24th. The price of BTC rose almost 17 per cent Friday.
The real news however doesn’t revolve around a price increase or a reversal in the predictions that the currency was going to keep dropping. It was why and what this meant for two economic giants.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">“We must take the <a href="https://twitter.com/hashtag/blockchain?src=hash&ref_src=twsrc%5Etfw">#blockchain</a> as an important breakthrough for independent <a href="https://twitter.com/hashtag/innovation?src=hash&ref_src=twsrc%5Etfw">#innovation</a> of core technologies.”<br><br>- Chinese President, Xi Jinping. <a href="https://t.co/5HFnHIC2GC">pic.twitter.com/5HFnHIC2GC</a></p>— ReadBTC (@readbtc) <a href="https://twitter.com/readbtc/status/1187831553105289216?ref_src=twsrc%5Etfw">October 25, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Many experts have already come out to declare Chinese President Xi’s endorsement of blockchain technology in all of China.
According to Chinese state media, President Xi remarked at a committee session on blockchain technologies that he sees the benefits of this industry. According to a rough translation of Xi’s comment, the world leader said that blockchain should be treated as a an “important breakthrough” for innovation of “core technologies”.
“[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.”
“Major countries are stepping up their efforts to plan the development of blockchain technology. Greater effort should be made to strengthen basic research and boost innovation capacity to help China gain an edge in the theoretical, innovative and industrial aspects of this emerging field,” Xi was quoted as saying by Xinhua.
Xi went on to call for the creation of “Blockchain+,” a platform alluding to personal development in key areas such as medicine, employment, law and education, but not limited to those needs.
Though China’s arms seem open to blockchain at this moment and the market has responded, it should be worth noting that since 2017, this same nation banned cryptocurrency and mining. As a replacement, a digital renminbi is being developed at this time. No changes to the ban have been alluded to or suggested.
If China and President Xi have stimulated the crypto market, then Europe and the United States have done the complete opposite.
Libra by some might be the last hope for China. Facebook has been pushing to get Libra off the ground and have been through multiple hearings on both sides of the Atlantic to gain support.
Facebook CEO Mark Zuckerberg even said to the Financial Services Committee in Washington D.C., that his firm’s project could deter Chinese innovation. Again, worth noting here that China sees Factbook’s Libra as a threat and the speeding up of the creation of their digital yuan was a reaction to this.
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In his Wednesday Oct 23rd Capitol Hill testimony, Zuckerberg added, “There are important risks that need to be addressed,” he continues to say, “I also hope we can talk about the risks of not innovating. While we debate these issues, the rest of the world isn’t waiting.”
“If America doesn’t innovate, our financial leadership is not guaranteed.”
Pressure from members of the U.S. government divided and drove prominent payments companies: PayPal, Visa, and Mastercard away from the Libra Association; a group of companies supporting the Libra project.
The problem facing Libra and most cryptocurrency and blockchain operations in the U.S. is the lack of government support for this industry. The U.S. has acted with caution, and what many would say it skepticism and fear.
China in contrast could be argued to have had a more heavy-handed and direct approach, but with understanding of the potential of the technologies.
Additionally, this month the U.S. Securities and Exchange Commission (SEC) filled an emergency action against the gram token, potentially delaying the October 31st release date in the U.S.
What may have seen as an uptake in the bitcoin price as a result of a support for a technology, might be the first sign of a long-term economic and technological race between the word’s largest economies.
Only the one willing to take the biggest risks can possibly win.