Zhao Changpeng's recent remarks have undoubtedly sparked widespread discussion about China's relationship with Bitcoin. He mentioned that China's huge share in cryptocurrency transactions and its potential intention to reserve Bitcoin are of concern. So, if Rabbit really starts to hoard Bitcoin on a large scale or participate in the "Bitcoin G7", what kind of impact will it bring?
The likelihood of a rabbit buying Bitcoin
Global crypto market shock: If rabbits start buying Bitcoin in secret, the market could experience an unprecedented price surge. Such behavior could be similar to central banks increasing their gold holdings, triggering other countries to follow suit to protect the value of their own assets.
Avoiding dollar hegemony: Bitcoin may become a tool to circumvent the dollar settlement system, especially in the current context of geopolitical tensions and frequent sanctions. Through cryptocurrencies, countries can to some extent evade the constraints of the dollar.
Challenging the traditional financial system: As Zhao Changpeng stated, if 'Bitcoin G7' really takes shape, Bitcoin could become a new global reserve asset, thereby weakening the international dominance of the dollar.
Potential resistance
Pressure from US financial regulations: If the government uses Bitcoin to weaken dollar hegemony, it will inevitably face strong resistance from the government and its allies. Previously, the US's regulatory crackdown on the cryptocurrency industry has indicated its zero-tolerance attitude towards threats to sovereign currencies.
Transparency and trust issues: While Bitcoin has decentralized characteristics, its transparency also means that any large-scale purchases will be noticed by the market, thereby increasing operational difficulty.
Internal policy contradictions: Although the government has supported blockchain technology and Central Bank Digital Currency (DCEP) in recent years, it still strictly regulates decentralized cryptocurrencies like Bitcoin.
Thoughts on 'Bitcoin G7'
The concept of 'Bitcoin G7' is similar to replacing the US dollar with Bitcoin as an international reserve currency, but achieving this is extremely difficult:
Technical and trust barriers: The transaction speed, fees, and network stability of Bitcoin currently struggle to meet the demands of a global reserve currency.
Geopolitical conflicts: Diverging interests among developed countries complicate the unified adoption of Bitcoin.
Central bank conflicts of interest: Central banks around the world tend to protect their own fiat currency authority, especially when digital currencies threaten the traditional financial system.
Possible future
Although the possibility of 'Bitcoin G7' or the government holding Bitcoin in the short term is low, the market discussion itself reflects widespread dissatisfaction with the current financial order. Bitcoin and other crypto assets may become part of a multipolar global economy, but the path is fraught with challenges.
In summary, this vision is more about the future financial landscape rather than an immediate reality. There is still a significant space for contention between the decentralized concept of cryptocurrencies and the sovereign attributes of nations.