- Bloomberg claims that China’s digital yuan “could challenge Bitcoin” and the U.S. dollar
- The article makes no mention of how Bitcoin could be targeted
- Bitcoin and a potential Chinese sovereign currency are different in every way
Bloomberg has claimed that China’s perennially imminent digital yuan “could challenge Bitcoin”, but this ignores a number of critical factors that illustrate that the network is, once again, talking out of its ass. Bloomberg offers no actual evidence to back up their case against Bitcoin, while the case against a digital yuan causing potential problems for the U.S. dollar is already documented.
Digital Yuan Can Legitimately Challenge the Dollar
Bloomberg’s purposefully attention-grabbing headline is backed up with some justification with regard to the dollar, but when it comes to Bitcoin its argument falls flat on its face – primarily because it doesn’t make one. The piece goes into great detail about how China watched the development of, and then swiftly banned, cryptocurrencies like Bitcoin, but has since used the principles behind them to develop and test a digital yuan.
China’s efforts to create a digital yuan is, in the words of Andrew Polk, co-founder and head of economic research at Beijing-based consultant Trivium China, because they see “an opportunity of being a global leader” in the emerging sovereign cryptocurrency space. This, the piece tells us, represents “a new threat to U.S. financial dominance”, which is a supposition we have discussed previously on FullyCrypto.
The challenges to U.S. hegemony of the global monetary system from China’s digital yuan are there for everyone to see, but what of Bloomberg’s claim that Bitcoin, too, is under threat? There is nothing in the piece, not one shred of evidence offered, to back up the headline.
Bitcoin is mentioned once in the entire article as an example of a cryptocurrency and no more before or after that, suggesting that the author has no valid reason to assume that Bitcoin is at risk from the digital yuan.
Bitcoin Has No Case to Answer…and No Evidence Against It
And nor should it. Bitcoin is a decentralized, government-agnostic financial revolution, who anyone around the world is (or should be) free to buy, use, and sell without government interference. The digital yuan will be created and controlled by the oppressive Chinese government, potentially for use only within the country’s borders, with every transaction monitored by the state as a means of enacting further control.
When it is ready it will likely be forced on its residents, with either incentives to use it or punitive action if it is not.
The digital yuan couldn’t be more different to Bitcoin’s ideology, conception, and use, and for Bloomberg to suggest that a future Chinese sovereign currency could compete with Bitcoin in any manner would illustrate a frankly worrying lack of understanding. However, seeing that they offer no evidence to back up the claim, primarily because none exists on which to draw, at least we can’t charge them with misrepresenting the truth.