The announcement of the planned launch of Facebook’s Libra is certainly a defining moment for crypto. This development represents unprecedented blockchain adoption into the mainstream tech world. However, unbeknown to many, there are Geo-political underpinnings that make this event not as innocent as it seems.
The USA and China have been embroiled in a trade war pretty much from the time President Trump was elected. This friction seems to have no end in sight especially after accusations that Huawei Phone Company built devices that had a backdoor for Chinese government spying. This has revived Sino-American tensions that can definitely impact a lot of aspects of the global economy and finance.
According to Huang Lianjin, there is more to these events than meets the eye. This is because there is a high likelihood that Huawei’s ban and the Libra launch are part of an overall strategy by the Trump administration to control the tech world.
Vested Interest in Anti-China Sentiment
Donald Trump has a simple but revealing slogan: America First. This essentially means that his administration wants to safeguard American domestic interests even at the cost of global alliances. As such, any supposed advantage will be the target of this regime.
More so, it is a fact that the core of Trump’s election base consists of workers decimated by globalization. The shift of manufacturing from the United States to China and other developing nations is obviously in the mind of these voters who have seen manufacturing jobs dwindle in recent decades. Free trade means that he who owns the most efficient means of production gets a larger stake in supply. As such, this is an advantage China brings to the table because of cheaper labor and more efficient industries.
President Trump promised the people that he would revive manufacturing and “bring back jobs.” Accordingly, making it harder for Chinese goods to access the American market is a means to this end. This is because China is a world leader in trade and the present USA administration is challenging that.
Huawei And 5G Technology
Huawei is an excellent smartphone manufacturer with products that arguably match anything Apple or Samsung produces. This is definitely the case when you put cost-benefit analysis into the equation.
The roll-out of 5G technology undoubtedly has the potential to transform a lot of things in tech. The implementation of this breakthrough, which could disrupt artificial intelligence massively, has become a political hot potato. The USA, and its allies like Canada, claims that Huawei is a front for Chinese espionage. As such, the western nations have put in place measures to stifle Huawei and conditionalities for a common 5G framework. This is despite the fact that regional partners like Malaysia and the Philippines have smooth Huawei partnerships.
Currency Control and Libra
In addition to tech, the Trump administration has publicly accused China of unfairly tweaking exchange rates to have an advantage. In the technology world, crypto represents the next frontier of finance. As such, even entities that were low on blockchain initially are now scrambling for a piece of the cake.
Make no mistake; Facebook is not into crypto for charitable ends. The fact that the company has only made institutional western finance giants like eBay and MasterCard partners shows that there are strategic ends to this coin.
Facebook has unparalleled institutional power in terms of marketing and data. This certainly gives it credibility to enforce and maintain the western status quo in financial matters. This coin definitely has nothing to do with decentralization ideals of Bitcoin and other cryptocurrencies. Instead, it is another front to perpetuate the financial dominance of the American lead coalition.
As such, Libra will develop globally distributed, industry-wide, self-circulating and hard-to-destroy economy. This is in line with an administration with a keen focus on self-preservation. The Libra coin blockchain can even replace the SWIFT transfer monopoly in the long run.