The Latest Report On CBDCs. A Dystopian Nightmare!

Cryptocurrencies’ continued adoption puts pressure on governments worldwide, and their reckless money printing has only added fuel to the fire. Now they're rushing to develop their Central Bank Digital Currencies before it's too late. In a previous article, I explained how the implementation of CBDCs could well be part of the great reset plan. Today, we’ll explore a recent report, revealing what features CBDCs will have, how governments plan on rolling them out, and what implications this could have for cryptocurrency. 

The report was composed by the Bank for International Settlements or BIS, which is fundamentally the bank for central banks. Its primary role is to facilitate coordination between central banks around the world. Over the last few years, the BIS has been devising a template for Central Bank Digital Currencies or CBDCs to be issued by their respective central banks. 

It must be stated that CBDCs are not cryptocurrencies by any standards. This is because CBDCs are centralized, permissioned, and offer very little or no privacy. They are entirely controlled by central banks and the governments to which they are accountable. Almost every Central Bank is working on a CBDC of its own, and seven of these central banks have been actively helping the BIS construct a CBDC template. 

These are the United States Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank, the Bank of Canada, and the Swedish Central Bank. In October 2020, these seven central banks and the BIS published the first of many reports about what and how CBDCs will look. The second CBDC report came out on September 30th, 2021, and contains even more details about what CBDCs will look like. 
It's divided into a three-part system;

1. Design and interoperability.pdf 
2. User needs and adoption.pdf 
3. Financial stability implications.pdf 

The authors provided a short six-page summary.pdf of their three-part CBDC report, and there are a few interesting points in the summary, which were seemingly not mentioned in the three sections of the report. 

The very first thing worth pointing out is the most important, and that's everything you read here applies to a public or retail CBDC. Now, this is a small but insanely significant detail because central banks, governments, and select institutions will use their own so-called wholesale CBDCs. A wholesale CBDC template is also being worked on, but one blatantly obvious thing is that regular folks like us will use a completely different digital currency to the people in power.  

Source: https://voxeu.org/article/central-bank-digital-currency-concepts-and-trends

Another concerning detail quoted at the end of the first page of the report summary is, “CBDCs would be likely to have wide-ranging impacts on public policy issues beyond a central bank's traditional remit.” 

This seems to imply that CBDCs will be used to enforce public policy mandates in all other areas of our lives, not just the financial aspect. 

Adding to that, as quoted in the screenshots below, “different users and needs would need to be defined and addressed in the system’s design.” 

And also, “Central banks might consider measures to influence or control CBDC adoption or use. This could include measures such as access criteria for permitted users,” …] 

This suggests that even retail CBDCs will have different rules for different groups of people. 

 

How Will CBDCs Be Designed? 

Much of how CBDCs will be designed has to do with the current financial intermediaries’ roles in such a system. For starters, the report states, “Central banks would be the only entities entitled to issue and redeem a CBDC and would bear the ultimate responsibility for the design of the CBDC system and the operation/oversight of the core Ledger.” 

Although central banks could theoretically cut out all existing financial intermediaries, the report stresses the importance of partnering with the private sector simply because the central bank can't possibly recreate, much less maintain the same infrastructure on its own. 

Below is an image of what the financial system looks like now in most countries, 

Source: Coin Bureau

And the image below is what a CBDC-based financial system would look like, according to the report. As you can see, the exact role each party plays here is not entirely clear. Still, the report notes that “if the central bank were to play a too operational or dominant a role in the ecosystem, private intermediary participation could be curtailed with a reduction in the diversity, innovation, and efficiency of the system.”

Given that private financial intermediaries will be a part of the picture, CBDCs will need to be interoperable internationally and domestically with their existing infrastructure. But, because this will likely cause many technical issues, the report recommends limiting the number of financial intermediaries that are allowed to operate. 

Also, the report states approval processes for new intermediaries or specific services and strong oversight could help mitigate technical issues. Meaning, the central bank will decide exactly which financial intermediaries are allowed to operate. 

 

Privacy Issues

When it comes to privacy, it states total anonymity is not possible as central banks would design CBDC Systems to meet anti-money laundering and combat the financing of terrorism requirements. 

Supposedly, our data will be safe because the central bank would have no commercial interest in end-user data and may be better placed than a commercial entity to commit to a minimal use of such data. 

The report also brings up the infamous travel rule put in place by the FATF, which means that every CBDC  transaction above a certain amount would be automatically tracked. 

 

Interoperability

The next part of the report briefly touches on the interoperability requirement for CBDCs and notes that the essential foundation of interoperability would be standardization, which would allow compatibility. 

The report’s last mention of interoperability is that a CBDC could be introduced with an explicit policy goal to catalyze a migration of national standards to an internationally promoted standard.  In other words, CBDC standards will be Global.

 

What Is Their Strategy For Global Acceptance?

The BIS and central banks know that the public may have trouble understanding or accepting their new monetary system, as mentioned below, but they have a plan on helping us “ordinary people” understand. 

It starts by outrightly admitting that the main reason why central banks are developing CBDCs is because of cryptocurrency adoption, stating that, “without continued innovation and competition to drive efficiency in a jurisdictions payment system, users may adopt other less safe instruments or currencies potentially leading to economic and consumer harm.” 

Ironically the report acknowledges that “technological innovation has been transforming the markets for retail payments at pace over recent years, with many new payment methods platforms and interfaces evolving to become faster, cheaper, and safer.” 

The logical conclusion of this kind of statement would be to allow this kind of payment innovation to continue, but apparently, the BIS and its banker cohorts believe this is better done differently. 

In this section of the report.pdf, it outlines the three ways by which CBDC adoption can be achieved by;

1. Fulfilling unmet user needs
2. Achieving network effects
3. Not requiring everyone to buy a new computer or phone

The report detailed how CBDCs exactly fulfill unmet user needs, and according to the BIS, the main selling points are security, low cost, high liquidity, programmability, and privacy. The report then starts to detail some more manipulative ways of achieving CBDC adoption. Namely, “incentivize consumer use of CBDC by dispersing, social benefits and transfers to individuals in CBDC” and “allowing consumers to pay their taxes in CBDC.” 

The report also provides a formula for various CBDC marketing campaigns targeting consumers with different pain points and needs. The funny thing is that one of these consumer archetypes in their category is a person “who does not want commercial banks to know his or her Identity or track his or her spending.” So naturally, the best solution to this issue is to give all that information directly to the central bank instead. 

 

What Are The Financial Stability Implications? 

The next section of the report is the financial stability implications of a CBCD and is where cryptocurrency is first acknowledged. The report notes that “stablecoins are only just starting to be developed, and will need to satisfy regulators that they are safe.” It would seem they missed the memo that stablecoins have been around for years and their users know which ones are safe and which ones are less safe. 

Then the report goes on and makes a ridiculous claim which is believed to be categorically false by the crypto savvy, “Unlike central banks, issuers of stablecoins are not bound by principles to design products that would coexist and interoperate with other forms of money or to promote ongoing innovation and efficiency.” 

In the crypto space, it’s common knowledge that stablecoins like USDT and USDC are available on more than a dozen different blockchains. It's in the BIS and central banks’ economic interest to be as interoperable as possible. Stablecoins are literally leagues ahead in interoperability terms of any CBDC. Even Visa has managed to test USDC as part of its payment infrastructure. 

Source: Techcrunch

Then, the truth is revealed when the report states, “Significant stablecoin adoption and the potential consequent fragmentation could result in excessive market power and the type of deposit disintermediation described as a risk for CBDC issuance.” 

This statement officially confirms that central banks see stablecoins as a risk to a central bank digital currency rollout. They're also hyper-aware that “the actual introduction of CBDCs could be some years away. In the interim, providers of private money and tokens are expected to continue developing and expanding their service offerings.” 

Because the central banks can't possibly catch up, they can only slow stablecoins down through regulation, and we see more news of crackdowns and reviews in recent headlines.  

Although the next part of the report is quite technical, many astute crypto enthusiasts’ interpretation is that central banks know that CBDCs can't compete with stablecoins because they can't offer the same yields on savings found in Defi. Yields are something that wealthy investors and institutional investors crave, and their influence could protect stablecoins from harsh regulations.  

The third section of the BIS report is where things get really interesting. Besides the fact that the projected adoption of CBDCs in G20 countries is between 4% and 12%, CBDCs could pose a considerable threat to the financial system via the banks. 

To understand why we must go back to when the stock market started crashing in the lead up to the Great Depression. People scrambled to withdraw all their money from their bank accounts, only to find that their banks didn't have their money because it had all been lent out. 

The bank runs caused the banking sector to collapse, which ultimately caused the Great Depression. The FDIC was created shortly afterward to ensure that banks always had enough cash on hand to ensure bank runs could never happen again. 

However, the BIS report highlights that a CBDC would be seen as a safe haven by many investors during a crisis. It is suggesting that investors would move their money out of the banking system and into the central bank. 

This would lead to a collapse of the banking system like it did a hundred years ago. Even if this collapse doesn't happen, the report admits that in a CBDC system, “a common theme is that maintaining bank profitability levels could be challenging.” 

The report gives a series of recommendations for how private banks could mitigate the loss and risk of potential collapse, and some consider them laughable, at the very least.

One aspect particularly stands out of all the report’s side effects a CBDC could have on the banking system. It states, “the introduction of a CBDC by the central bank could cause a reduction in commercial bank deposits, which would consequently translate into more expensive credit lines.”

In other words, CBDCs could make loans more expensive, which means it could become next to impossible for the average person to buy a house or other valuable assets. You could say it's almost like "you’ll own nothing, and you’ll be happy."

Notably, the same run on the bank risk exists with stablecoins, and you could argue that it's already begun as the $130+ billion in the stablecoin market cap came from bank balance sheets. 

After highlighting these risks and others, such as CBDCs potentially replacing government bonds, as the primary safe-haven asset among investors, the report explains how central banks can use their omnipotence to prevent these scenarios from playing out. 

Quote, “quantity-based safeguards would restrict the use of CBDC, through imposing hard limits on the transfers and or holdings of CBDC.”  It also states, “Limits could also be applied varyingly for different CBDC account holders.” Better yet, quote, “Such limits could be imposed on a permanent basis or on a transitional basis.” 

In other words, if the economy starts crashing and everyone runs to CBDCs to protect their wealth, the central bank will prevent them from doing that to prevent the crash, with no regard for investors. 

The BIS report concludes that a material shift from bank deposits to CBDC if the holdings of CBDCs by individual users were left unconstrained, could have a non-trivial long-term impact on bank lending and intermediation. 

 

What Is The Likely Outcome?

As terrifying as this BIS report is, it reveals just how difficult it will be to roll out such a dystopian system and arguably next to impossible. This is simply because there's no way to introduce a CBDC without eating into the bottom line of the banks and financial intermediaries. They would sooner side with crypto than let that happen, and some would suggest that this could be the outcome of introducing a CBDC.

There is also no way on God’s earth that the average person would adopt a CBDC without being forced, and the moment someone starts to use force to mandate something and claim it is good, it becomes clear that it's not. This begs the question of why central banks would go through all this trouble to create what is likely to be an abysmal payment method. 

Many would argue the answer is that this isn't their actual goal, and the evidence is easily found in the design of what they're building. CBDCs are nothing short of a tool for total control, and every single stated benefit and feature only exists to entice people into this totalitarian scheme.

As the report admitted, there are already numerous financial technologies that can do everything CBDCs can and more. Most of these financial technologies have come from cryptocurrency, and it’s odd that the report didn't mention any cryptocurrencies besides stablecoins. 

It also didn't mention the word blockchain either. It may be that the BIS doesn't want to draw any more attention to cryptocurrencies. What is the likelihood of any of the governments that read the report getting the idea of adopting Bitcoin as El Salvador did? Other countries are likely to follow suit, especially since it's much easier to plug into a financial system that's been proven to be secure and reliable rather than build a new one from the ground up. 

It looks like they won't have any other choice either because fiat currencies are losing value and credibility by the minute. However, this might actually be what the central banks want though. After all, the only way they could possibly convince anyone to adopt their CBDCs is if their existing fiat currencies are worthless. Even then, the crash could happen much quicker than they anticipated, and their CBDCs are far from being ready to fill that void. 

It may sound a little crazy, but we could end up with a scenario where the only kind of money left with any value is select cryptocurrencies and China's digital yuan (e-CNY). I think we all know which one the global majority would choose.

So while politicians and bankers “fluff around,” trying to implement their new financial system, we can do our part in adopting credible cryptocurrencies and emerging projects that tower over any technology the central banks come up with, especially in the case of decentralization autonomy and privacy. Systems that will have a positive impact on “We the people” not only financially, but also socially and professionally. 

 

A special thank you for valuable insights and research performed by Coin Bureau

Also published on Before It’s News – https://beforeitsnews.com/economy/2021/10/the-latest-report-on-cbdcs-a-dystopian-nightmare-3044898.html

 

Evergrande – A Potential Global Contagion. Will It Impact Crypto?

There have been major headlines, and a lot of talk and speculation concerning the Chinese developer, the Evergrande Group, and its demise and potential collapse it is facing. Could we be on the verge of another Lehman Brothers moment? An uncontrolled default of the Evergrande group could lead to a credit crunch, implicating all financial markets globally. But what about crypto?

 

Chinese Property Bubble

Before we discuss Evergrande, let’s look at the Chinese property bubble. It has, after all, provided the ingredients for this company to become so systemic. To say that the Chinese property market is in a bubble is an understatement. It's been so hot recently that off-plan units sell out online in minutes. 

For example, in March of last year, 288 apartments in a new Shenzhen development sold out in less than eight minutes. A few days later, an additional four hundred units sold out in record time. 

People are legitimately willing to fork out upwards of $100,000 immediately just to have the opportunity to buy a property 2 to 3 years from now. One of the main reasons the Chinese property market has been exploding at such a pace is that property is seen as one of the primary forms of investment in the country. 

When compared to their western counterparts, Chinese citizens own more property than they own bonds or stock. In China, at least 96% of urban households own at least one home. In the US, however, that number is closer to 65%. 

Furthermore, statistics reveal that $900 billion a year was invested into the property market at the peak of the US property boom. Currently, there is $1.4 trillion being invested in Chinese property. However, in recent years, buying property in China has been more about speculation than investing. 

They've been investing in property mainly because of their belief that prices will always go up. This belief, of course, is a self-fulfilling prophecy that we've seen on many occasions, including back in the 2008 subprime mortgage crisis. 

The graph below shows the annual residential real estate investment in China versus in the US. As indicated, the Chinese bubble has grown and grown. Even the 2008 financial crisis did nothing to that demand, and it kept on climbing throughout. 

However, much like 2008, this Chinese property bubble is not being built on savings. There is a lot of debt being taken out to buy these homes. For example, from 2010 to 2019, China accounted for 57% of the total increase in household borrowing compared to the US, which only accounted for 19%. 

It's not only the fact that this debt-fueled property bubble is systemically dangerous, but it's also leading to massive increases in the cost of living. Interestingly, in an upmarket area of Tianjin with a population of about 15 million, apartments cost around $836 per square foot, which is around the exact cost of the most expensive areas in other parts of the world, where the disposable income is seven times more than in Tianjin. 

This property boom has not gone unnoticed by the Chinese Communist Party, and it has become increasingly worried about this speculation.  General Secretary of the CCP, Xi Jinping, stated that “housing is for living in, not for speculation.” But they're in a catch-22 situation here; Given that so many people have their net worth tied up in housing, if the government were to try and deflate that bubble, it could lead to social unrest, and that is not something you’d want in a one-party state or anywhere else, for that matter. 

It's kind of a weird symbiosis where the CCP is happy to let the property market continue its growth provided it keeps the people happy, which has been the case. But eventually, as has happened with any number of asset bubbles in the past, when the ingredients that first drove the bubble and are no longer there, you have an epic crash. 

Who And What Is Evergrande?

Evergrande is one of the largest property developers in China. It was established in 1996 in the southern city of Guangzhou and has grown at a breakneck pace ever since.  Its founder, Hui Ka Yan, was at one point the richest man in China as he steered Evergrande through that Chinese property boom. In 2009 the company did an IPO on the Hong Kong Stock Exchange and raised almost $1 billion.

The firm owns more than 1,300 projects in over 280 cities across China to give you an idea of just how prominent this developer is. It's also a massive employer in the country. It employs over 200,000 people, and if we include all the people who work on its projects as contractors or subcontractors, that figure expands to over 3.8 million. 

But the company had ambitious goals and always wanted to expand beyond just property. It decided that it wanted to diversify into several different sectors and business units heavily. In some cases, these were as far from its core competency as they could be and included building electric cars, food and beverage businesses, bottled water, and dairy products. 

In 2010, the company bought a soccer team and also built a soccer school. It also had aspirations of building a 1.7 billion dollar soccer stadium in Guangzhou, where this team could play. Evergrande has recently laid out ambitions to build museums, theme parks, a health chain, and even into the financial services business by offering people wealth products. 

Image by The Civil Engineer

These lofty ideas to branch out from residential real estate would have been quite feasible if Evergrande could fully fund this expansion, but the sad reality is that the bulk of this expansion has come due to piles and piles of debt. $300 billion, to be exact. 

 

Building Purely On Debt

This debt burden has made Evergrande the most indebted property developer globally, and this sobering fact has come back to bite the company. In its rapid expansion over the last few years, Evergrande has taken on all forms of debt. These include the likes of bank loans, bonds, and international dollar bonds. 

However, one of the most common forms of debt that it's taken on is commercial paper. To clarify, this is shorter-term unsecured debt such as IOUs and other payables. It's an interest-bearing note that large banks or corporations typically issue to meet short-term financial obligations. 

Evergrande issued this commercial paper to all suppliers and contractors who worked on its projects. It was given as a substitute for cash and viewed as very secure. So secure that these very suppliers and subcontractors used the Evergrande commercial paper as a method to pay their suppliers, Etc. 

So, Evergrande commercial paper was essentially transformed into a quasi currency that people viewed as legitimate, despite being literally unsecured debt. This practice of using commercial paper to fund operations is not exclusive to Evergrande, but it has been one of the most prolific issuers. 

Then when it comes to more traditional forms of debt, Evergrande has taken out billions in bank loans from many Chinese Banks. Last year, Evergrande reported total bank and other borrowings of around $107.4 billion. This debt would have been all well and good if Evergrande had been able to pay it back. 

However, Evergrande’s bottom line has been deteriorating over the past couple of years. In 2020, Evergrande’s operating income was down 75% two years prior, plus there was also a fall in gross margin. The chart below shows how precipitous that fall in revenue has been, courtesy of Ming Zhou on Twitter. 

So what all that means is that Evergrande has even less below-the-line income to pay interest on its outstanding debt, let alone the principle. This realization has come to a head, and the company publicly admitted, a few months ago, that it may not be able to service all of its debt. Banks in China have started freezing Evergrande deposits to keep some collateral for paying back these loans. 

 

Default Is On The Cards

Of course, the international financial markets have taken notice. S&P has downgraded Evergrande’s dollar bonds from CCC to CC, with a negative outlook, and raised the chances of a debt restructuring or default. Fitch also downgraded Evergrande and its subsidiaries.

The markets have also reacted as bonds trading near par back in May are now trading at close to 30 cents on the dollar. This shows that these bond investors think that a default is on the cards. It's not just the debt market that's taking a hit, though. Evergrande shares have been on a sustained decline over the past few months, and they're already down 80% this year. 

Notably, Evergrande has not only issued a great deal of commercial paper to its suppliers and lenders. It has also taken money in deposits from close to 1.5 million people. These are people who put down these deposits hoping that they would one day buy some property from the developer.

This begs the question; if this company is so essential to the Chinese real estate sector and it's teetering on the brink, why doesn't the Chinese government bail it out? After all, they are a centrally planned economy, and they have the final say. 

Answer; the Chinese government has taken a hard line on leverage in the property development sector. A few years ago, it came out with directives to limit debt. These have become known as the Three Red Lines. 

These are cash on hand, the value of their assets, and equity in their businesses. Banks are required to limit real estate lending to 40% of their total under rules taking effect in January. The CCP would not want to create a moral hazard by bailing out Evergrande. If anything, it would more than likely want to make an example of the developer. 

So what all this means is that a default is not only likely but inevitable. In the case of the behemoth that Evergrande is, it may get ugly because of the contagion effect this could have across China's property sector and include its global credit markets. So there is a real risk that it won’t be contained within China; it will spread to the rest of the world, much like the 2008 credit crunch did. 

The counterparties that are at risk and Evergrande’s liabilities involve more than 128 banks and over 121 non-banking institutions, according to the letter Evergrande sent to the government late last year. Depending on how much exposure these counterparties have, there could come a situation in which they would themselves become too hot to touch. 

Let's also not forget about how much of that Evergrande commercial paper is out there. It's not well-tracked, and it has helped develop an entire quasi shadow banking system of suppliers, buyers, contractors, and counterparties. 

All of these folks have been using Evergrande paper as if it was as good as gold. There's no way a company as big as Evergrande could go bankrupt, right? 

Now, this fear of default could also spread to the other indebted property developers. Banks may become concerned about their ability to service their debts, and their commercial paper and bonds would also become toxic. 

Even if this is not the immediate result, you have a perverse situation where even the action of Evergrande trying to make good on its debt can precipitate a worse debt problem. This is because to raise funds, to settle its debt, it will have to sell assets. 

The overwhelming majority of Evergrande’s assets are property. If there is a fire sale of its properties, this could lead to a property crash and hurt everyone in the country. It would send all the property developers in the country into further, negative territory and damage the savings of all those Chinese who bet on the market. It creates a spiral where the collateral backing debt is falling in value, making everyone more indebted. 

 

Impact On International Markets – Global Contagion

This has a significant impact on international markets as there are a lot of holders of Evergrande’s debt offshore. These include asset managers, international bond funds, and other corporations. 

For example, a large bond fund called Ashmore Group, based in London, has over 400 million dollars worth of Evergrande bonds. Other asset managers that have exposure include BlackRock Inc., UBS Group,  and HSBC Holdings.  Both BlackRock and HSBC boosted their Holdings of Evergrande debt as recently as August. 

And these are only their International bonds. When it comes to the mountains of Evergrande commercial paper, no one really knows. This is a lot harder to track as these assets are not standardized securities like bonds. 

Moreover, what happens if the contagion spreads to the rest of the Chinese developers, banks, and companies? What happens if their debt cannot be paid? The risk of contagion in the Chinese property and credit markets could wreck the portfolios of these managers that hold their debt. And that's just the debt side. 

We should not forget that these Chinese developers, banks, and companies have publicly traded equity on International markets such as the Hang Seng or Shanghai stock exchanges. If these were to tank as they did with Evergrande, it could further hurt international portfolios. 

 

Impact On The Cryptocurrency Market

What about the crypto market? In times of market stress, we’ve learned that Bitcoin and other cryptocurrencies assets have a pretty strong correlation with equity markets and are not entirely isolated from what’s happening on the global macro front. We saw this play out last year during the covid-inspired crash. We also saw it happen numerous times over the past few months with concerns about potential Fed tampering.

It could be that large fund asset managers and institutions based out in Asia may have to sell their Bitcoin holdings to cover the losses that they hold in shares or debt of these developers. Or maybe the situation in which retail investors in China have to sell their crypto holdings to settle their debt. Even though the Chinese government has been trying to prevent its citizens from holding crypto, it hasn't fully succeeded as Bitcoin traders in China still wield enormous influence. 

Bitcoin is an asset that faces the same risks in the short term from global financial contagion. 

Image and related Article by Cointelegraph.com

However, one other factor unique to the crypto markets and has been drawn into the Evergrande saga is Tether. There are concerns that the controversial stable coin issuer, Tether, could be quite exposed to Evergrande. These suspicions have arisen due to a disclosure that the company hoped would temper the FUD and not add to it. 

That disclosure is the attestation report.pdf issued by Moore Cayman a few months ago, giving a breakdown of the reserves backing up USDT, stating 50% of its reserves were held in commercial paper and certificates of deposit. That equates to $30 billion.

One question comes to mind:  Why does Tether have so much commercial paper? Well, there are two possible reasons. One is that it likes to earn interest on this commercial paper, and the other is that there are very few banks that would be willing to hold $30 billion in cash and cash equivalents or Tether. 

The question that many have been asking is whether Tether has any Evergrande commercial paper. Ever since this speculation has come to light, Tether has emphatically denied holding any Evergrande commercial paper. 

If it were the case, it would mean that the reserves are not fully backed because all that commercial paper would be worth a lot less. Even if it were only a tiny component of the commercial paper, the knowledge that USDT is not 100% backed by assets would create a great deal of uncertainty around holding USDT. 

So, why does this matter for the crypto markets? Well, because Tether remains one of the essential components for Bitcoin liquidity. On many offshore exchanges, it is the stable coin pairing of choice as indicated on Coinmarketcap. USDT trading volume stands at $56 billion per day. It is 28X more than the next-in-line USDC shown on the chart below. 

Image CoinMarketCap

So, quite simply, if there is a crisis of confidence in Tether, this trading volume could dry up. People would be reluctant to use Tether to trade, creating a systemic liquidity crisis in crypto. 

The goal of this article is not to cause FUD. It’s to create awareness of a risk that is not being adequately considered. Whether we see a full-blown financial crisis due to an Evergrande default is not clear as yet. It all depends on whether the Chinese government will come to its aid. A complete bailout by the Chinese government is the only thing that could help stave off the contagion. 

But on the other hand, if the CCP does assist, it creates a perverse incentive where developers will think that the rules don't apply to them when they binge on debt. This is precisely what happened on Wall Street in the wake of the financial crisis. So right now, the CCP is stuck between a rock and a hard place. 

Optimism Remains Prevalent In The Crypto Markets

Despite all of the short- to medium-term risks an Evergrande default poses, there is good reason to remain optimistic about crypto in the long run. Fundamentally, nothing has changed, and external factors are beyond our control. Even if there is a situation that snares Tether, it could help to serve the long-term stability of the crypto markets. 

Tether Inc. has been at the center of controversy and FUD for years and is reportedly not particularly transparent. Many crypto enthusiasts would love to move to a reality where this FUD is no longer in the picture. If ever there was a crisis in confidence of Tether, it could lead to a legion of long-term hodlers. People would be reluctant to convert to stable coins, including USDC. 

Either that or they would convert their BTC holdings into other cryptocurrencies, which benefits the ecosystem holistically. The future is still bright for many cryptocurrencies with purpose and utility. Ultimately, this could lead to a new financial operating system and be needed to sidestep any debt-based or quasi currency. 

 

 

Resources: Coin Bureau

Also published on Before It’s News
https://beforeitsnews.com/financial-markets/2021/10/evergrande-a-potential-global-contagion-will-it-impact-crypto-3385095.html

 

Who Will Triumph In These Dark Times? Markethive – An End Times Project

We live in uncertain times, prophesied as the end times and reflected in the Book Of Revelation, with catastrophic events impacting society on every level. With the global economy in free fall and increased surveillance, our privacy, freedom, autonomy, and in many cases, people’s livelihoods are confiscated by the reigning tech giants with no regard for humanity, freedom of expression, and basic human rights. 

Canceling the people brave enough to broadcast their message of corrupt officials, cover-ups, and expose those responsible for the global chaos we are all experiencing and have fallen victim to. It’s all part of a greater awakening and the fall of the cabal. 

Many scholars still see the Book Of Revelation as an enigma and difficult to understand fully. But, as pointed out by an individual not known for his extensive biblical knowledge, he understood it to mean “We win in the end.” Although simplified, there is an obvious truth to this interpretation.  

The number of people appalled at where things are headed who wish to preserve human sovereignty and freedom grows daily. Our opportunity is here, right now, to make a difference together. While the cliques are still on the offensive, busy upholding their biased agenda and wielding their so-called power to oppress humanity’s self-expression, we can elude this evil and determine our future on our terms. 

Markethive – An End Times Project

So we don’t just wait in the hope of salvation. We get on with doing whatever is in our power to do. Markethive is an end-times project delivered to thwart those who hope to profit to an obscene degree from an end of human health and freedom. Built by the people, for the people, Markethive is a robust entrepreneurial community of those who wish to preserve a human society dedicated to spiritual and political freedom and prosperity for future generations.

As with many newly created systems, awareness, understanding, and mainstream adoption take time; however, the recent worldly events have certainly accelerated things on two fronts; 

1. The decentralized concept of Blockchain and Cryptocurrencies as a new monetary system.

2. The emergence of sovereign platforms like Markethive with independent cloud systems to circumvent      the repressive, unconscionable conduct of the social media elite and service provider giants, including      AWS, Apple, and Aweber. 

A growing number of people, aspiring entrepreneurs, and critical thinkers will not kowtow to the insidious actions of big tech and are part of what is causing real frustration and risk for the elite as they try to suppress and control the global populace. 

However, I believe their efforts will be thwarted, likened to the Hydra, the Greek legend of a giant multi-headed immortal monster. When one head is severed, two more will grow. 

A Flourishing Economy

At Markethive, known as the ecosystem for entrepreneurs, we are building a flourishing economy. A world within a chaotic world but not of that world, upholding self-sovereignty, freedom of speech, and liberty.

Some platforms, specific to microblogging, video, or digital media, are rising in opposition to what big tech is doing to silence the people and cover up the blatant lies and nefarious activities. However, to be completely untouchable by the tech giants, platforms need to cut all ties by owning and installing their technology, giving them the sovereignty to broadcast and be of altruistic service to the world. 

Users from all walks of life, influencers, marketers, business owners are looking for and migrating to more sovereign platforms to exercise their right to free speech along with the opportunity to improve their livelihood. Markethive is leading the way and can deliver a complete system where you will no longer have to rely on the monopolies for its services of any kind on any level.  

A Divine Vision

Markethive owns and operates on its independent servers and is underpinned by Blockchain with its Hivecoin (HVC). Due to Markethive’s infrastructure, the Markethive Consumer Coin will be one of the few cryptocurrencies that will remain strong, gathering momentum in this time of transition to a digital economy. 

Markethive is a divine vision that will thrive in these end times, driven by the community, with the velocity effect required to maximize the economy. Supply and demand within the Markethive ecosystem will result in financial sovereignty, autonomy, privacy, and peace. 

As we move forward with a digital economy, Bitcoin and purposeful altcoins will become the foundation of business. Markethive is a decentralized social media, marketing, and broadcasting network, with the imminent release of its exchange and wallet. That makes it an all-encompassing platform that is essential in these dark times of division and derision and critical for humanity’s financial health and well-being.

 

Thomas Prendergast, CEO and Founder of Markethive – and the architect of the blockchain-driven Social Market Network, has dedicated many years to building this “Ark” in anticipation of these end times. 

Giving back the autonomy and freedom of expression desperately needed to communicate and conduct any business online. With a holistic approach, Markethive enables every individual to realize their potential regardless of what is happening out there. Thomas says, 

“Amid this crisis, it’s business as usual and then some for Markethive, providing financial inclusion for all is our primary objective. The answer is Markethive’s blockchain technologies and integrated entrepreneurial ecosystem where people have privacy, autonomy, and sovereignty. They earn an income with our native crypto coin (HVC) in many different ways daily, including becoming a shareholder via the ILP, the added staking advantage of the Vault, and also profiting from the many cottage industries within the Markethive ecosystem. Essentially, it’s the community that owns Markethive and not the hierarchy". 

Transcending The Evil In The World

With God’s help, we will withstand the technocracy that is trying to enslave humanity. There is something greater than these tech giants and elitists that even they cannot control. Every thinking individual recognizes that something more prominent is taking place. 

We are spiritual beings experiencing physical reality, with many feeling trapped in the oligarchs’ agenda. A dictatorship can only exist with followers. We don’t need to go along with the obedient herd; we do have another choice. Above all, know that we can overcome all negative worldly emotions and circumstances from a spiritual foundation. 

Markethive is already in every country in the world to lift hundreds of millions of people into an environment of freedom of speech and information, financial sovereignty, and well-being. We are responsible for creating a massive army for the Lord and a foundation for the last days; The final harvest.