What's going on with China? \ stacker news ~bitcoin

763 sats \ 7 comments \ @siggy47 29 Apr 2023 bitcoin

Hong Kong is apparently requiring banks to adopt crypto as a prerequisite for licensing. It's obvious to everyone by now that mainland China controls all policy decisions on the island, including this one.

I am confused. A cynic would say that this is simply a way to bolster use of the yuan CBDC, but there is no reason to encourage competition to their fiat digital currency.

Is it possible that China or the ever expanding BRICS consortium is partially responsible for the recent increased bitcoin hash rate? The new proposed BRICS currency will be backed by hard assets, such as commodities. Perhaps bitcoin will be included? Russia has already expressed an interest in mining "cryptocurrencies", which of course means bitcoin.

I wonder what SN members make of this, particularly those living in BRICs nations?

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659 sats \ 1 reply \ @SwearyDoctor 29 Apr 2023

They're not "requiring banks to adopt crypto" per se, at least the formulation is misleading. The regulator is reminding banks that they have to accept legal customers, and can't cite "crypto" as a reason not to accept them. I.e., it's doing the opposite the US is doing, which just made non-engagement with the space a prerequisite for whoever will take over Silicon Valley Bank.

While the Beijing regulators do steer Hong Kong, it's still under One Country, Two Systems. Hong Kong is used as a laboratory to experiment while keeping the larger Chinese banking system (more or less) isolated. So this is the national regulator directing the local banks to prevent them from letting local risk-management or regulatory fears drive them to pre-emptively reject crypto companies.

I don't think this has anything to do with the digital yuan, or the BRICS interchange currency that's only in its pre-planning stage in any case. I'd assume, rather, that they're trying to profit from an increasingly negative US regulatory environment, trying to draw business to Hong Kong that otherwise would have moved from the US to Singapore or Malta. This seems the more likely direct incentive here.

5 sats \ 0 replies \ @siggy47 OP 29 Apr 2023

That makes sense. I guess we'll have to wait and see.

30 sats \ 0 replies \ @jk_14 29 Apr 2023

The new proposed BRICS currency will be backed by hard assets, such as commodities.

and that means: trusted third party and there is deficit of trust between BRICS countries, that's rather obvious so Bitcoin would be reasonable choice, if they are wise enough...

20 sats \ 1 reply \ @faithandcredit 29 Apr 2023

Well that does seem a bit strange. My guess is that "the enemy of my enemy is my friend" so if they can boost crypto for now, it can maybe accelerate the move away from USD? And then when USD is diminished, they can come after crypto in ways they could not do to the USD. Thats the cynic in me i guess

0 sats \ 0 replies \ @siggy47 OP 29 Apr 2023

This is more or less what I'm also thinking.

100 sats \ 0 replies \ @tomlaies 29 Apr 2023

"BRICS" hardly exists as a real world concept. It's really just China and the other emerging markets. Here is a rough overview over how they intertwine economically:

Especially after the GFC the economy of China has become very resources hungry. China went from the cheap labor manufacturing center to an economy with large infrastructure projects and own production lines that were not just outsourced foreign structures.
Brazil, South Africa, Argentina (also Russia more and more now)etc. were on the way of developing from resources/agrarian to industry before the GFC but the huge demand for resources made a lot of their economies drift towards exports of these

Thus if these countries would keep trading in dollars China would need to acquire a lot of dollars and other BRICS would keep getting dollars that they would in return exchange for more consumer goods. There is an interesting episode about this dynamic on Bloomberg right now: https://www.bloomberg.com/oddlots

If you think about this, that means no country in this triangle is in a happy geostrategical position: The US doesn't want to have a lot of their dollar flow to China, China doesn't want to acquire dollars from the US and other emerging markets don't want to export low value stuff for importing high value stuff. It just make sense for China to not only move away from the dollar but also to diversify the directions and currencies of money flow.

0 sats \ 0 replies \ @DarthCoin 29 Apr 2023

smoke screen