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Marco Polo and the #Blockchain

Colin Stevens

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For many of us the world of crypto currencies, sometimes known as digital assets, is a mystery and those involved are performing some form of magic using a mysterious spell known as the blockchain. But those with experience of crypto currencies have realised that great rewards are available to those brave or clever enough to invest in this new world of digital finance, writes Colin Stevens.

But those with experience of crypto currencies have realised that great rewards are available to those brave or clever enough to invest in this new world of digital finance.

Best known of the crypto currencies is the Bitcoin, a crypto coin invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software.

Over the course of bitcoin's history, it has undergone rapid growth to become a significant currency both on and offline. From the middle of 2010 some businesses began accepting bitcoin in addition to traditional currencies.

Bitcoin was followed by Ethereum in 2015 and a host of other crypto currencies, so that today there are over 2000 crypto currencies.

The legal status of bitcoin and related crypto instruments varied substantially country to country at first, but many countries quickly realised that crypto currencies are the first apolitical form of money in history, which makes it borderless, impossible to control and regulate. Everyone can use crypto currencies for P2P transactions, which makes it the most inclusive form of money there is.

However, since nothing as decentralized as crypto currencies existed before, it is a true headache both to regulators and tyrannical regimes.

Enlightened governments began to realise the potential benefit of these digital assets, and accepted and even encouraged new crypto currencies tied to their national currencies – such as the USA with Tether (USDT), a crypto currency with a value meant to mirror the value of the U.S. dollar. The idea was to create a stable crypto currency that can be used like digital dollars. Once this happened crypto currencies came of age and became acceptable and mainstream.

Coins that serve this purpose of being a stable dollar substitute are called “stable coins” Tether converts cash into digital currency, to anchor or “tether” the value of the coin to the price of national currencies like the US dollar, the euro, and the yen.

Banks quickly realised the potential of crypto currencies, both for investment opportunities and for their business customers who wish to use it for instant cross border money transfer and exchange services. Major banks are now launching their own crypto coins or “tokens”.

J.P. Morgan in the USA this month became the first US bank to create and successfully test a digital coin representing a fiat currency, that is a government-issued currency that isn't backed by a commodity such as gold.

The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between their institutional clients. Wall Street has been quick to welcome both the advantages this brings to businesses in competitive markets and the investment opportunities coupled with potentially seismic return on investment for early investors.

Across the Atlantic, after negotiations with the Chinese government, LGR Global is creating a new crypto utility token called “Silk Road Coin” which is destined to facilitate trade and commerce along the Belt and Road Initiative, formerly known as One Belt One Road or OBOR for short. This is a global infrastructure development strategy by the Chinese government mirroring the old Marco Polo trade route between China and Europe. Started in 2013, its purpose is to benefit and invest in nearly 70 countries and international organizations along the route.

The Belt and Road project will construct a unified large market and make full use of both international and domestic markets. The Belt and Road Initiative addresses an "infrastructure gap" and thus has potential to accelerate economic growth across the Asia Pacific area, Africa and Central and Eastern Europe, estimated to be worth at least US$900 billion per year over the next decade, 50% above current infrastructure spending rates. The gaping need for long term capital and an instant and easy means of cross border money transfer and exchange services along the 70 country Belt and Road project almost guarantees the success of the new Silk Road Coin crypto currency, with substantial gains possible for early investors.

Many investors wise enough to invest in bitcoin in its initial years made millions, even billions of dollars, pounds or euros return on their initial investments. Just as the Venetian merchant and adventurer Marco Polo did between 1271–95, new merchant adventurers stand to make their fortunes via the new digital currencies of the Silk Road.

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De-coupling from China would be the wrong way to go, Germany warns

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The European Union needs to engage with China despite many differences instead of opting for a more isolationist approach, Germany said on Wednesday (21 April).

"In the EU, we have been describing China as a partner, competitor and systemic rival at the same time," German Foreign Minister Heiko Maas (pictured) said ahead of a virtual meeting with his Chinese counterpart Wang Yi.

"In all these three dimensions we need strong, sustainable communication channels with Beijing. De-coupling is the wrong way to go."

Berlin's warning against de-coupling is in line with Beijing's long-held position against disengagement among nations, including with China, despite mutual differences.

Last month, China was hit by a round of coordinated sanctions from the United States, European Union, Britain and Canada over reports of forced labour in the far western Chinese region of Xinjiang, accusations that Beijing rejects.

Ties between China and Germany have generally remained stable since last year, Chinese State Councilor and Foreign Minister Wang Yi said later in his meeting with Maas.

Wang also said major economies like China and Germany should jointly resist any de-coupling, and instead seek to uphold the stability of global industrial and supply chains, according to a statement from the Chinese foreign ministry.

At the same time, China does not approve of any re-drawing of ideological lines, and is even more opposed to engaging in “small cliques”, and even arbitrarily imposing unilateral sanctions based on false information, Wang said.

Last week, U.S. President Joe Biden met with Japanese Prime Minister Yoshihide Suga in his first face-to-face White House summit since taking office, where both leaders said they shared serious concerns about the human rights situation in Hong Kong and Xinjiang.

In a show of economic cooperation to the exclusion of China, Biden said Japan and the United States would jointly invest in the tech sector including semiconductor supply chains.

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China’s Xi calls for fairer world order as rivalry with US deepens

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Chinese President Xi Jinping is seen on a giant screen at a media center, as he delivers via video link a keynote speech at the opening ceremony of the Boao Forum for Asia, in Boao, Hainan province, China April 20, 2021. REUTERS/Kevin Yao NO RESALES. NO ARCHIVES.
Chinese President Xi Jinping applauds at the closing session of the Chinese People's Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing, China March 10, 2021. REUTERS/Carlos Garcia Rawlins
Chinese President Xi Jinping is seen on a giant screen at a media center, as he delivers via video link a keynote speech at the opening ceremony of the Boao Forum for Asia, in Boao, Hainan province, China April 20, 2021. REUTERS/Kevin Yao NO RESALES. NO ARCHIVES.

Chinese President Xi Jinping (pictured) on Tuesday (20 April) called for a rejection of hegemonic power structures in global governance, amid growing tensions between Washington and Beijing over a widening range of issues including alleged human rights abuses, writes Kevin Yao.

Speaking at the annual Boao Forum for Asia, Xi criticized efforts by some countries to "build barriers" and "decouple", which he said would harm others and benefit no one.

China has long called for reforms of the global governance system to better reflect a more diverse range of perspectives and values from the international community, including its own, instead of those of a few major nations.

It has also repeatedly clashed with the biggest stakeholders in world governance, particularly the United States, over a range of issues from human rights to China's economic influence over other countries.

"The world wants justice, not hegemony," Xi said in remarks broadcast to the forum.

"A big country should look like a big country by showing that it is shouldering more responsibility," he said.

While Xi did not identify any country in his remarks, Chinese officials have in recent times referred to US “hegemony” in public criticisms of Washington’s global projection of power in trade and geopolitics.

On Friday, U.S. President Joe Biden held his first face-to-face White House summit since taking office, in a meeting with Japanese Prime Minister Yoshihide Suga in which China topped the agenda.

Both leaders said they "share serious concerns" about the human rights situation in Hong Kong and China's Xinjiang region, where Washington has said Beijing is perpetrating a genocide against Muslim Uighurs. China has denied abuses.

In a display of economic cooperation to the exclusion of China, Biden said Japan and the United States would jointly invest in areas such as 5G technology, artificial intelligence, quantum computing, genomics and semiconductor supply chains.

As the Biden administration rallies other democratic allies to harden their stance on China, Beijing is seeking to strengthen ties with its autocratic partners and economically dependent neighbours in Southeast Asia.

Chinese speakers at the Boao forum, Asia's answer to Davos, also affirmed Beijing's commitment to global free trade.

China's trade practices were a focus of an intense tariff war between Beijing and Washington under the Trump administration, with the United States accusing Beijing of unfair subsidiaries that give Chinese companies unfair advantage abroad and forced transfers of technology and intellectual property.

"The biggest experience that China's accession to the World Trade Organization 20 years ago is that we Chinese are not afraid of competition," Long Yongtu,China's former chief negotiator for the China's WTO entry in 2001, told the forum on Monday (19 April).

However, despite the persistent confrontation between the US administration and China, both sides have rediscovered a common interest in battling climate change, after bilateral talks on fighting greenhouse emissions fizzled out during the Trump era.

Last week, U.S. climate envoy John Kerry flew to Shanghai to meet with his Chinese counterpart in the first high-level visit to China by a Biden administration official.

Both agreed on concrete actions “in the 2020s” to reduce emissions.

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Competition: EU and China will discuss competition policy priorities in the digital sector during the 21st Competition Week

EU Reporter Correspondent

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Officials from the EU and China will meet online from 26 to 28 April 2021 for technical discussions on competition law and enforcement. The 21st EU-China Competition Week will focus on subsidy cases under the Fair Competition Review System that China started implementing in 2016. It will also deal with the co-operation between the European Commission and EU member states with respect to state aid cases as well as Regulation and policy initiatives to address competition concerns in digital markets. The Competition Weeks offer a platform for exchanges on competition policy between the Chinese State Administration for Market Regulation (SAMR) and the European Commission together with EU National Competition Authorities. The Competition Weeks are the cornerstone of the longstanding competition dialogue between the competition authorities of the EU and China in line with the commitments set out in the Memoranda of Understanding and Terms of Reference signed between all sides. The EU-China Competition Week is part of the Competition Co-operation project, a 5-year EU funded programme offering technical co-operation to competition authorities in Asia. The objective is to exchange experiences and strengthen convergence in competition policy, to the benefit of citizens and businesses in both the EU and Asia. More information about the European Commission's bilateral dialogue with China in the field of competition policy is available on the Commission's website.

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