China’s Centralized Gold Backed Cryptocurrency is on the Horizon to Replace Cash

If you have seen or read the news lately, you know what’s going on in North Korea. The missile tests have continued, the war of words is escalating, and if the technology the North Koreans have keeps improving, they could get closer and closer to the US First they could reach U.S. forces in Guam. Soon, Hawaii would be well in range, and then it would be plausible that soon after, they would have the capability to hit the US mainland. 

Here’s a question: With the crippling US sanctions in place, where’s North Korea finding the money to advance its nuclear program? It doesn’t seem to make sense. But then, economic sanctions do have their limitations--the fiat system. For North Korea to fund its program, such an undertaking would only work if they were to establish a steady flow of money coming in that neither the US nor its allies were able to control – cryptocurrency. 

We’re not talking about the cryptocurrency you see on the news. The one where lucky speculative investors are driving a Ferrari one day and losing their homes the next. This would have to be a more sophisticated instrument. Perhaps one that was heavily backed and much more stable – say the digital yuan. 

This is not a reality yet, but it could be soon. China is now planning on digitizing its currency and when that happens, it will be almost impossible to stop the North Koreans from getting the capital they need to continue growing their weapons program.

In this scenario, what could the US do? Some experts argue that if China digitizes its currency, the US would almost have to follow suit. When this happens, the US government would not only have a digital currency, but also the world’s best surveillance tool. 

The irony of it all is that Bitcoin, the cryptocurrency we are most familiar with, was designed largely to protect and promote anonymity--to establish a competitive monetary system beyond the control of the government and central banks. A cryptocurrency designed by the government though would do the exact opposite. 

With both the digital yuan and the digital dollar, every transaction would be able to be tracked and monitored by the government. It’s the War on Cash but on speed. The government may still keep banks involved (or they may not) to control the flow of money and protect the status quo but there will no longer be the barrier between banks and the government protecting transactional information. 

This is issuing a new era in currency. We are on the cusp of a time where digital currency will start to transition into the norm and begin to replace cash. 

What started with Bitcoin was pushed further this year by Facebook’s proposed Libra cryptocurrency. While a major corporation creating its own money has been stopped or at least stalled, for now, many took notice. The Bank of England suggested that cryptocurrency should replace the dollar as the international reserve currency. And, China began to speed up their transition to the digital yuan. 

For everything that Bitcoin stood for in regard to privacy, the digital yuan will be the exact opposite. A central record of every transaction, owned by the government so they know exactly who is spending money and on what at all times. 

This wouldn’t be the first time this type of thing has happened. Following World War II, when the US dollar became the backing for the world’s monetary system, it gave the US the financial power that they have kept for all these years. It has allowed America to dominate the financial landscape and impose its will on every country in the world. 

This is exactly what China is aiming to do and it has a massive head start. As you'll see in the video below, rumors are spreading their central banks crypto will be backed by gold.  

https://gsiexchange.wistia.com/medias/ls7wjzvpr9?embedType=async&videoFoam=true&videoWidth=640