Myth of Money: China's Checkmate
The technology weapon you didn't see coming... Introducing the Blockchain Services Network.
|Tatiana Koffman||Aug 30|| 6|
Welcome to this week’s edition of the Myth of Money, a weekly newsletter on all things money, economics and technology read by 10,000+ subscribers.
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U.S. - China relations continue to be strained as trade negotiations are called off for a “phase-one” trade deal, while President Trump continues to push against TikTok, WeChat and other Chinese technologies prevalent among U.S. users. Trump’s “tough on China” platform for the upcoming presidential election is gathering increasing support, but is this technology war in the best interest of the West?
While much of the trade war is playing out publicly, China has been working on a move to knock out American influence on a global stage once and for all.
Building on the momentum of the DCEP, more publicly known as the Digital Yuan, a new currency poised to take over trade and remittances in emerging markets, China has also been developing a new type of interconnectivity - the Blockchain Services Network (BSN).
What is the BSN?
The BSN is China’s national initiative to integrate adoption of blockchain technology across government, big business and emerging markets.
The BSN will be the backbone infrastructure of interconnectivity through mainland China, city governments, private businesses, and individuals, in both China and abroad. This network will form a new Digital Silk Road to create a link to China and its trading partners globally.
Think of the BSN as the new internet - a more efficient way to share data, value and digital assets in a completely transparent and secure way.
A frequent comparison has been made between BSN and the ‘new internet’:
“The internet we know today, was first operated in local hubs with clusters of private networks. Over time, these clusters got interconnected through a set of protocols which make up the current world wide web. This infrastructure, however, was never designed to transfer valuable data in a trustless environment. The BSN is specifically designed with digital assets in mind…”
This Week By the Numbers
American Stock Market had another spectacular week, erasing all COVID-related losses from 2020, largely due to outsized returns for the tech sector. It is unclear when we will see a recovery across all sectors, however. Precious metals like gold and silver continue to outperform amid geopolitical uncertainty. Bitcoin hovered around $11,500 all week as investors are patiently waiting for another bull run.
Elon Musk unveils brain chip implant: 'It's like a Fitbit in your skull'
Tech mogul Elon Musk unveiled his latest foray into science fiction Friday night: a brain chip implant to allow people who are paralyzed to operate technology, such as smartphones or robotic limbs, with their thoughts. "I think it's going to blow your minds," Musk said. "It's like a Fitbit in your skull with tiny wires." But the coin-sized chips, developed by Musk's secretive startup Neuralink, are a ways off from being useful to humans. Friday's livestreamed YouTube demonstration was on a pig named Gertrude, who Musk said had a brain chip implanted two months earlier. Read Full Story.
Fed: Rates to stay ultra-low even after inflation picks up
The Federal Reserve announced a significant change Thursday in how it manages interest rates by saying it plans to keep rates near zero even after inflation has exceeded its 2% target level. The change means the Fed is prepared to tolerate a higher level of inflation than it generally has in the past. And it means that borrowing rates for households and businesses — for everything from auto loans and home mortgages to corporate expansion — will likely remain ultra-low for years to come. The new goal states that “following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.” Read Full Story.
SEC Modernizes Definition of Accredited Investor Rules
The Securities and Exchange Commission (“SEC”) announced on August 26, 2020 that it was adopting amendments to the definition of "accredited investor." Participation in most private capital market deals generally requires, at a minimum, being an accredited investor. The SEC’s amendments broaden the definition of an accredited investor to allow greater participation in private capital market transactions for persons who have the knowledge and expertise to understand these deals, but otherwise would not have historically qualified as an accredited investor. The amendments allow investors to qualify as an accredited investor “based on defined measures of professional knowledge, experience or certifications in addition to existing tests for income and net worth.” Read Full Story.
US consumer spending rose a moderate 1.9% in July
U.S. consumers increased their spending by 1.9% last month, a dose of support for an economy struggling to emerge from the grip of a pandemic that has held back a recovery and kept roughly 27 million people jobless. The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. Friday’s report from the Commerce Department also showed that income rose 0.4% in July after two months of declines. Read Full Story.
Product of the Week:
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Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation. Check out my articles in Forbes here.
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