China Still All In On Crypto, Make No Mistake About It – Top US VC Partner
Regardless of what the market outlook says, China is still committed to digital currencies and blockchain technology, the general partner of a top private American venture capital firm has said.
Andreessen Horowitz’s Katie Haun made the view known to CNBC last week when asked what she thinks China’s recent moves portends for the idea of decentralized currencies. She said the move is not new citing a similar move in 2017 when Chinese crypto exchanges were banned from trading Bitcoin.
China recently renewed calls for crypto-related mining activities to be halted within its borders. The crackdown dealt a blow to the prices of top cryptocurrencies like Bitcoin in recent days. It has also been identified as already leading to a seismic shift in hash rate power concentration from China to other parts of the world including North America and parts of Europe.
China still all in on crypto
“I was actually surprised this took them this long to do this time. Let me tell you why,” Haun said during the interview. “China is actually all in on crypto. Make no mistake about that. Xi Jinping actually declared crypto and blockchain architecture as a top five national priority for China. So they are all in on crypto. They are all in on their brand of crypto, which is a closed permission system. Kind of at odds with the open, decentralized protocols we see as the future of the cryptosystem. Bitcoin is one of those…”
She thinks China’s moves kind of reflect the staying power of open decentralized cryptocurrencies like Bitcoin “because we’ve seen this happen before” adding that she thinks “China is going all in on crypto in a big way and this is a real opening for western societies, and the U.S. included, to lean in,”
BIS brands cryptos as bad for public
Haun’s comment comes in the wake of the release findings of a new study by the Bank for International Settlements (BIS). The BIS Annual Economic Report describes innovations such as cryptocurrencies, stablecoins and the walled garden ecosystems of big techs as all that “tend to work against the public good element that underpins the payment system.”
“By now, it is clear that cryptocurrencies are speculative assets rather than money, and in many cases are used to facilitate money laundering, ransomware attacks and other financial crimes,” the report states. “Bitcoin in particular has few redeeming public interest attributes when also considering its wasteful energy footprint.”
On the other hand, it praises central bank digital currencies (CBDCs) as offering central bank money in digital form thus giving them the unique advantages of settlement finality, liquidity and integrity.
“They (CBDCs) are an advanced representation of money for the digital economy,” BIS, which acts as a bank for central banks, adds in the report. It also cites that CBDCs – as denominated in the national unit of account – are a direct liability of the central bank.
It should be noted that China is a major player in the race to issue a CBDC as a form of digital money which the BIS thinks can contribute to an open, safe and competitive monetary system that supports innovation and serves the public interest. The Asian giant is seen as being a major global economy pioneering the use of central bank-backed currencies.