Bitcoin Won’t Win Worldwide Adoption Because China Controls It: Ripple CEO

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Bitcoin Won’t Win Worldwide Adoption Because China Controls It: Ripple CEO

It is commonly known that China is a big influence in determining bitcoin pricing. However, Ripple CEO Brad Garlinghouse indicated yesterday that owing to China’s influence, bitcoin’s path to become the world’s dominant cryptocurrency may stall. (See also: Is China Totally Dependent On Bitcoin And Crypto Prices?)

“China has complete control over Bitcoin.” In China, four miners control more than half of the bitcoin market. How do we know China will not act (to regulate bitcoin)? How many nations want to adopt a currency controlled by China? “It’s simply not going to happen,” he told attendees at yesterday’s Stifel Insight Cross Sector Conference in Boston.

Prominent personalities are increasingly referring to bitcoin as a potential global currency. In March, Twitter Inc. (TWTR) CEO Jack Dorsey told the London Sunday Times that bitcoin may become the world’s one global currency in 10 years. This month, Apple Inc. (AAPL) co-founder Steve Wozniak shared Dorsey’s sentiments, but added that he did not necessarily think it would happen. (See also: Steve Wozniak: Bitcoin Scammer Stole My Bitcoin.) Garlinghouse criticized the concept of a single international currency “absurd” and stated it made no sense. “I don’t believe any big economy will let it,” he remarked.

How China Controls Bitcoin

China has two advantages as far as bitcoin is concerned.

For starters, it is home to the vast bulk of bitcoin mining operations. This gives it the ability to regulate the quantity of currencies in the market as well as increase transaction fees depending on mining difficulty. High transaction fees, as seen in the previous year, may discourage the usage of bitcoin for everyday transactions and make it more cost-prohibitive for trading. Second, several of the largest cryptocurrency exchanges for trading bitcoin, such as Binance, are based in China. Because of their low costs, these exchanges see substantial trading volumes and attract worldwide retail investors.

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The concept of a global currency is not new. During the 1944 Bretton Woods conference, noted economist John Maynard Keynes presented the notion of a worldwide currency. The International Clearing Union, a central bank, would be in charge of creating bancor, a worldwide currency that would trade on par with national currencies. The bancor would be utilized for international commerce, erasing exchange rate imbalances and the inherent benefits and drawbacks that come with it. (See also: Could One World, One Currency Work?)

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns 0.21 Bitcoin and 1 Litecoin as of the day this post was published.

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