would a Chinese cryptocurrency overtake Bitcoin?

Will the Chinese Cryptocurrency Overtake Bitcoin?


would a Chinese cryptocurrency overtake Bitcoin?The People’s Republic of China is currently working on its own Chinese cryptocurrency, and the effects are bound to shake up the global economy.

Many countries, such as Turkey and Iran, are also considering the launch of a state-backed cryptocurrency. Others, such as Venezuela, have been forced to launch one due to geopolitical factors. If a political power such as China, Russia, or even a country like Japan or Switzerland, launch a cryptocurrency, the crypto industry would explode even further.

It would be impossible to predict the effect a Chinese cryptocurrency would have on the overall global economy, but IG, a UK based retail forex provider, has shared the potential effects with Crypto Disrupt.

The effects and possibility of a Chinese cryptocurrency

IG has created an interactive guide that analyzed the impact and probability of relatively unlikely world events. The analysts who worked on the study included professor Robert Kelly, professor Tom Hale, and CEO Ben Page.

According to the guide, the introduction of a Chinese cryptocurrency was held to increase the risk of a financial crisis significantly, especially the Forex markets, which would have a knock-on effect on the overall economy. Countermeasures from the ECB and US Federal Reserve would be a certainty.

The dynamics of world trade would be severely altered, and other countries would soon follow with the launch of their own cryptocurrency. The dollar’s dominance as the worlds reserve currency would be seriously challenged.

Probability and impact table

A summary of the results of the guide are outlined below –

The Great Barrier Reef dies due to climate change – Probability Score: 9 Impact Score: 6

Venezuela defaults on its debt – Probability Score: 8 Impact Score: 5

China’s government-backed cryptocurrency overtakes Bitcoin – Probability Score: 5 Impact Score: 7

Apple repatriates all $200B of its foreign assets – Probability Score: 5 Impact Score: 1

A snap election in the UK makes Jeremy Corbyn prime minister – Probability Score: 4 Impact Score: 2

Trump wins a second term – Probability Score: 4 Impact Score: 6

Oil returns to $100 per barrel – Probability Score: 3 Impact Score: 3

The Qatar World Cup is moved to another country – Probability Score: 3 Impact Score: 1

Tesla files for bankruptcy – Probability Score: 3 Impact Score: 2

The British housing market collapses – Probability Score: 2 Impact Score: 4

Britain crashes out of the EU without a deal – Probability Score: 2 Impact Score: 4

Results analysis

While the absolute results of a Chinese cryptocurrency are almost impossible to quantify (being unprecedented), the effects relative to other events are interesting to analyze. The possibility of a Chinese cryptocurrency overtaking BTC seems higher than one would expect.

It also seems to be the event that would have the most impact, more than the ongoing destruction of the barrier reef, a British housing market collapse, or a Venezuelan default. This is a testimony to the power of financial dominance, the root of all commerce and industry.

Of the 11 events, it is deemed the third most likely. Donald Trump’s chances in the 2020 election might be under threat, a fact that John McAfee will be delighted to hear.

The guide results are definitely bearish for BTC, and very bullish on the idea of Chinese uptake of the cryptocurrency. Of course, it would not be a real cryptocurrency, in the sense that it would be an enforced medium of exchange, much like fiat. The Chinese Central Bank has called the concept of ICOs and all other cryptocurrencies ‘ridiculous’ while working on their own cryptocurrency project. ICOs and exchanges have been basically eradicated from the country, something that might hurt China in years to come.

If the Chinese cryptocurrency does take over BTC, it will be likely due to its enforcement, and not through voluntary free market adoption.

Digital Nomad with an interest in Zen and Blockchain technology.

Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.

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