Senator Cynthia Lummis (R-Wyo.) wasted no time Thursday asking Treasury Secretary Scott Bessent the large query: Is China utilizing blockchain to create a rival to American monetary dominance?
Bessent informed the Senate Banking Committee he “wouldn’t be shocked.”
Abstract
- Bessent hints at gold-backed digital belongings from China, but it surely’s unconfirmed.
- Hong Kong’s sandbox position permits China to discover new monetary applied sciences, like a gold-backed digital asset, with out immediately involving mainland authorities.
- Why does it matter? It may probably be a secure different to the greenback.
“We don’t know that for certain,” he added. “There are many rumors that China could also be creating digital belongings backed by one thing aside from the RMB, maybe gold-based. We haven’t seen that.”
So, what’s China’s sport plan?
Apparently, Hong Kong is their “sandbox” — a monetary testing floor the place they will play with new concepts with out getting mainland China too concerned.
Meaning they will cook dinner up gold-backed digital belongings whereas preserving it on the down-low. A gold-backed asset may present a secure retailer of worth, which might immediately problem the greenback’s reserve foreign money standing — particularly because it wouldn’t be topic to U.S. financial coverage or sanctions.
In the meantime, China’s digital yuan continues to be all in regards to the RMB, so it’s not fairly as rebellious.
Bessent didn’t cease there
When it got here to Iran, he dropped this gem: Iranian leaders are transferring cash out “like loopy,” signaling “the tip could also be close to” for the present regime. In a second of surprising drama, he likened it to “the rats leaving the ship.” If that’s not a metaphor for the ages, I don’t know what’s.
And in a ultimate mic-drop second, Bessent harassed the significance of passing the Readability Act, acknowledging that making use of capital good points tax on cryptocurrency is a fancy mess. The complexity of crypto taxes? It’s no shock there.
In conclusion, the world of digital belongings, gold-backed currencies, and escaping rats has by no means been extra thrilling. Keep tuned for the subsequent episode of “China’s Sandbox Adventures.”
