China’s blockchain circle should not be so impetuous

8 Jul, 2019 14:26
source: Tony Fu Hong Kong General Manager of Singularity Financial

On July 4th and 5th, the Chinese blockchain community was bombarded by two pieces of news about the blockchain circle, one The US Congress Sends a Letter Asking Facebook to Stop the Libra Project Immediately, and the other The IMF Schedules to Issue the Global cryptocurrency IMFCoin, may Weakening the Dominant Status of the dollar. At first glance, one is a bad news for the blockchain industry, while the other is a good one. However, if we trace back to the source of the news, we’ll find that two news headlines are contradictory to the facts. The relevant wording has caused misunderstandings, which made the public spread the misleading information.

For the contradiction in the first news, five US congressmen sent a letter to Facebook and its partners, asking to suspend Libra project progress before the regulators and the Congress finished their review on the Libra-related issues and took relevant actions. During this suspension, they planned to hold public hearings on the pros and cons of a series of cryptocurrency-based activities and to discuss legislative solutions.

The five congressmen “hopes and call for the suspension of Libra project” in the joint letter. This open letter was not a bill, so it was not mandatory. Previously, some other congressmen also questioned Libra. Maxine Waters, chairman of the House of Representatives’ Financial Services Committee, issued a statement, asking Facebook to suspend any action on developing cryptocurrency until the Congress and regulators had the opportunity to review these issues and take actions. According to the US political system, congressman does not have the right to  ask any enterprise to do anything; they can only appeal or plead; now it is only a proposal of some individual congressmen, which cannot represent the Congress; even if the bill is passed by the Congress, it also requires the common agreement of the House and Senate for the bill to take effect. Therefore, Facebook can completely ignore it.

Even so, Facebook will still actively talk to the congressmen. On July 16th and 17th, Zuckerberg will participate in the two hearings on the Facebook issue. A Facebook spokesperson said that, the company is looking forward to the questions raised by the congressmen, but will not suspend the Libra’s development process.” We can see that the facts and the misleading information in The US Congress Sends a Letter Asking Facebook to Stop the Libra Project Immediately are widely divergent.

For the second news, after careful verification, IMFCoin is proved to be a concept raised in 2017, when the chairman of the International Monetary Fund (IMF), Christine Lagarde, mentioned at the Bank of England Forum that the Special Drawing Rights (SDR) might be digitized, which is the IMFCoin hereby. Investopedia, an American media suddenly wrote an article to report on this matter on June 25th, 2019, but IMF has not had any new moves recently. The article widely spread on the Internet was written on the basis of the translation of Investopedia’s report.

Deep prejudice from foreign-funded institutions

Recently, IMF and the World Bank (WB) did publish a joint report that explored the impact of financial technology on the global economy and monetary system through the feedback from 96 participating member countries. According to the report, “the cryptocurrency supported by the central banks may become a reality”.  In this investigation, 20% of the feedback institutions indicate that they are exploring the possibility of issuing the central bank cryptocurrency, but these works are at early stages, and there are only four items under testing, according to the report. There is no mention of IMFCoin. The speculation about the “IMFCoin” has not been confirmed by IMF. It follows that the facts and the misleading information in The IMF Schedules to Issue the Global cryptocurrency IMFCoin, may Weakening the Dominant Status of the dollar, are also widely divergent.

Recently, a Chinese blockchain entrepreneur shared a story with me: when the core founding members put on some road shows in North America last year, they met many North American institutions, whose knowledge on China was scarce, thinking that all China’s blockchain projects were pump and dump (bubbles). It was extremely difficult for this team to prove that it was a reliable Chinese team. Such impressions left on overseas communities and investors by Chinese teams are not groundless. The above-mentioned two twisted news may support my opinion from another perspective.

I believe that only by improving its inherent quality, eliminating impetuousness, and going global will the global community hold less misunderstanding against China’s blockchain industry.

Only by doing things rigorously and using our own profession to win recognition from the global community can we truly gain respect and identification from the international industry.