Major economies such as China have for the past few decades been thriving especially when it comes to new technologies, especially those that are based on the internet. Historically, politics, banking, and the economy have been affected by the emergence of new technologies in one way or the other. It is therefore important to identify how the emergence of the cryptocurrency economy has been affecting economics, politics and the banking industry in major markets, particularly in China and the U.S.
China’s cryptocurrency situation
Cryptocurrency especially Bitcoin and other major cryptocurrencies such as Ethereum, Litecoin and Bitcoin Cash have been widely adopted in the two markets. However, China is a special case because it started out with massive adoption of the big coins fueled by the deteriorating performance of fiat currencies and also the need to store wealth in a manner that would not be affected by inflation. Cryptocurrency adoption in the country had been adopted so well that many businesses had begun accepting digital currency payments. However, this did not go well with political authorities.
Regulators in China have since then taken action against the cryptocurrency market by instituting bans against cryptocurrency trading, cryptocurrency mining and cryptocurrencies in general. The Asian country has even kicked out all the cryptocurrencies that were based in China. It was, in fact, the first country to completely wage war against cryptocurrencies, citing worries about a cryptocurrency bubble among other concerns.
The impact of cryptocurrency in the U.S
The West seems to have taken a more lenient approach to cryptocurrencies compared to China. From a social aspect, Bitcoin, Ethereum, Bitcoin Cash, and Litecoin have become quite popular among traders, adopters and also in the corporate investors in the U.S., Of course, the biggest reason for this widespread adoption is the fact that they consider these cryptocurrencies to be investment opportunities. Most of the adopters and investors purchase them either as a store of wealth or so that they can sell them at a higher price in the future.
The U.S government has expressed worries about the decentralized nature of cryptocurrency, making it roughly impossible to regulate them. It has also argued that this aspect has allowed cryptocurrencies such as Bitcoin to be used to facilitate social evils such as funding terrorism and drug trades.
Regardless, the U.S government seems to identify the fact that cryptocurrency is here to stay, and has thus been focusing on implementing regulations on exchanges to at least have some degree of control. It is also worth noting that the cryptocurrency market has become so popular that major organizations such as the New York Stock Exchange have noticed and have even taken action. Earlier this year, the NYSE announced that it was teaming up with a blokchain startup called Blockstream to launch a cryptocurrency data feed. Meanwhile, the cryptocurrency market and blockchain seem to be gaining more traction in the global community. Governments and corporates are welcoming the idea of blockchain-based systems given the advantages that it offers and the fact that it is shaping up to be the technology powering future systems.