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Max Keiser: China's Cryptocurrency Will Be Backed by Gold

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  • Alex Dovbnya
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    Max Keiser spills some beans about China's gold-backed cryptocurrency (presumably DCEP) that could pose a serious threat to the US Dollar

Max Keiser: China's Cryptocurrency Will Be Backed by Gold
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Contents

According to financial commentator Max Keiser, the US is in danger of falling through a "trap door" that is set by China, whose gold-buying spree recently surpassed 100 tons.      

In such a metaphoric way, Keiser dropped a bombshell that China's much-talked-about cryptocurrency is going to be pegged to gold during his most recent appearance on Kitco.     

“[China] is rolling out a cryptocurrency, a lot of the details have not been divulged. I can tell you that the cryptocurrency that China’s rolling out will be backed by gold. It’s a two-pronged announcement. Number one, China’s got 20,000 tonnes of gold, number two, we’re rolling out a crypto coin backed by gold, and the dollar is toast.”      

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China's crypto push

As reported by U.Today, the People's Bank of China plans is set to become the first central bank to roll out its own digital currency called "DCEP" after working on the project for about six years.

China's renowned interest in crypto comes after President Xi Jinping endorsed the Blockchain technology, which underpins Bitcoin. His words allegedly pushed the BTC price by about 40 percent on Oct. 25.      

As of now, very little is known about the so-called "China Coin" that has been adding more grease to the rumor mill for months. However, it is evident that the communist state is vying to become a standard-setting global superpower (for better or worse).    

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Bitcoin is still aiming for $100,000

When asked about his recent six-figure prediction, Keiser opined that Bitcoin could go ten million against the dollar. 

"I think it's just a matter of timing. So, that forecast is still $100,000+. But let's be honest - in dollar terms, it's infinity. It could go to five million or ten million against the dollar."

He further mentioned that gold is currently making new all-time highs against a bevy of fiat currencies, but this fact somehow remains overlooked. 

Binance CEO Chanpeng Zhao recently predicted that the BTC price could touch $16,000 "soon-ish" while strengthening the China narrative.     

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability

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  • Vladislav Sopov
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    According to its Financial Stability Report of November 2019, the Board of Governors has warned about the dangers of stablecoins.

Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability
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Contents

The Board of Governors of the U.S. Federal Reserve System have issued their monthly Financial Stability Report. This special report is dedicated to the profits and risks of "global stablecoins".

Stablecoins: Global System with So Many "Ifs"

First, the Federal Reserve admits to the numerous advantages that stablecoins present as a concept. It has been highlighed that stablecoins are "faster, cheaper, and more inclusive payments could complement existing payment systems". This is in comparison to cases where traditional financial institutions are sophisticated and poorly accessible. Stablecoins can also be managed to eliminate the volatility of cryptocurrencies, which is one of the borders for them to be utilized as the medium for exchange.

Therefore, the "global stablecoin initiatives" like Facebook's Libra can rapidly achieve cross-border adoption. However, the major threat for stablecoins is apparent - the "inability to convert in national currency". The loss of confidence in "pegging" the stablecoin to traditional assets can lead to a run, in which several holders will attempt to liquidate their stablecoins at the same time.

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This dramatic scenario may be caused by "poor design and governance", and can result in severe consequences for international economic activity, asset prices, and financial stability.

Transparency First

The Federal Reserve also outlined in its report that in many cases, stablecoins can be utilized for money laundering, terrorist financing, and other financial crimes. Therefore, the Federal Reserve would require operators of such systems to conduct their Due Diligence, as well as Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to avoid any abuse. Moreover, the problems of disclosure policy and protecting investor data should be of paramount importance for stablecoin issuers:

Disclosures should clearly detail consumer and investor rights and protections, including whether the holder of the stablecoin has any rights to the underlying asset. Issuers should be transparent on how the stablecoin is tied to the underlying asset, has been said in the Report.

Last but not least, the report highlighted that the Federal Reserve, together with the Group of Seven, will closely monitor stablecoin developments as well as all the risks associated with it.

Have anyone ever invested in stablecoins? Do you prefer to use it, or to pay extra fees for fiat gateways? Tell us your story on Twitter!

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About the author

 Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockhain. Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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