China Isn't Going to Make It — Anatoly Karlin

There is a good chance that crypto and Web 3.0 will transform global finance, governance, and the Internet over the next generation in fundamental ways. Many of these transformations will be in ways that challenge or at least question the traditional prerogatives of the state as regards censorship, monetary emissions, and even legal sovereignty. But it is not a process that can be reversed top-down at the global level. Now, it will just just pass China by. Fred Reed waxes eloquent about the “digital yuan”, but why would anyone want to use a centralized stablecoin pegged to the yuan that’s controlled from the PBC given the variety of more discrete and already existing alternatives? China can certainly enforce it within its own borders. But in the outside world, you have Bitcoin on the Lightning network, now universally implemented in El Salvador and soon to be integrated into Twitter micropayments according to rumors. There are many other competing decentralized solutions on Ethereum and other chains, including stablecoins pegged to various currencies...

I think Anatoly Karlin has this wrong for several reason, the first of which he mentions. It's a sovereignty issue and a state as the authority to protect its sovereignty with the full power of the state. Sure you can use crypto anywhere but is it worth the risk and the Chinese government is likely to set the risk bar very high.

Secondly, he assumes that other states won't defend their sovereignty, too. I am as sure of that as he is. We'll see down the line. I don't think that crypto will necessarily go away but it will be hobbled as a threat to sovereignty and government control of its finance and economic sectors, nationally and internationally.

Finally, I think he seriously underestimates China as a global competitor. Look what happened to the US in the case of Russia. Russia quietly became dominant in the development of military technology, meaning the US lost its dominance, but at the risk of nuclear war that would obliterate CONUS (military speak for continental United States). It is true that the US maintains a lead in many important sectors but that's what competition is about.

The Unz Review
China Isn't Going to Make It

Anatoly Karlin

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Predictably, ZH jumps on board. Because "freedom." Well, the outcome of this concept of freedom is anarchy.

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