Kimberly Rosales explains why cryptocurrencies should be viewed as more than a type of investment

Since its first announcement in 2008, Bitcoin (BTC) has seduced the public by positioning itself as the first cryptographic electronic currency with no intrinsic value, issued without a central authority, and capable of peer-to-peer digital transfers. Financial transactions are made directly between users without the help of intermediaries. Kimberly Rosales has always been at the forefront of this new trend. With her vast experience in cryptocurrency, she explains why cryptocurrencies should be considered as an investment.

BTC has been an inspiration for the rise of digital currencies and central banks are already valuing this technology. A central bank digital currency is digital money issued by a central bank denominated in the national unit of account and represents a liability of the central bank. Unlike existing e-money and cryptocurrencies, it represents a direct claim on a central bank rather than a liability to a private financial institution.

A recent survey of the recent has revealed that up to 80% of all central banks have considered issuing their own digital currencies. The Federal Reserve, the European Central Bank (ECB), the Bank of England, and the monetary authorities of Russia and India have also begun the process of developing their own cryptocurrencies.

“To talk about the objectives of governments such as China’s, one must first mention the current position of the renminbi,” Rosales points out. “China today is positioned as the second-largest global economy, but that status contrasts with the strength of its currency on the global chessboard.”

The renminbi lags far behind other international currencies. It accounted for 2.13% of international foreign exchange reserves in the third quarter of 2020, according to the IMF. Additionally, the share of global payments was only 1.88% in December.

Cash remains the dominant transaction mode for payments in China, but new payment methods that leapfrog the card system have become extremely popular. These new payment methods are based on digital money transfers using a variety of technological intermediaries, including mobile devices, QR codes, and token systems.

“Seeing its irrelevance and the dominance of the dollar in the global financial system, China is looking for its opportunity in the digital yuan and involves the use of blockchain technology to represent a country’s official currency, meaning it is regulated by a central bank unlike existing popular cryptocurrencies,” Rosales explains.

Not only is there the geopolitical argument, for the Chinese government, but the digital currency will also allow it to track the movement of money through its economy and thus tailor the country’s economic production decisions. Its goal is purely dirigiste.

In recent months, the functionality of the digital yuan has been tested. Its latest test has been with the arrival of the Lunar New Year by delivering packets of digital coins to 50,000 Beijing residents worth 200 yuan.

In the Shenzhen trial, participants received a total of 20 million digital yuan, which they could spend at approximately 3,500 designated shopping locations from February 1 to February 9. Participants accessed the cash through a mobile app. In the case of Suzhou, a digital yuan package was tested in December to about 100,000 participants, with a value of 200 yuan per package.

Despite the tests conducted, China’s renminbi management regulations have not been updated since 2018. They lack provisions on issuance and even a definition of digital currency.

Rosales notes, “China’s current Anti-Money Laundering Law also needs to be updated. Its scope, currently limited only to financial institutions, needs to be expanded to include digital currency, payment services, and enterprises engaged in digital currency trading. Other issues on which China has yet to adopt laws and regulations, such as digital taxation and the collection, management and use of electronic payments.”

At the same time, Chinese authorities are already facing an anti-counterfeiting challenge in counterfeiting in the form of e-wallets that have recently appeared. To address the counterfeiting problem, authorities must quickly build a payment infrastructure and establish a consistent business, technical and security standards.

About Kimberly Rosales

Kimberly Rosales is an entrepreneur and tech aficionado who, early on, understood the full capabilities cryptocurrency could offer. She founded ChainMyne, a FINTRAC-registered company, in 2020 as a means to offer an easier method for accessing digital currency, as well as to empower cryptocurrency holders. While the majority of her time is occupied by ensuring her business ventures constantly run smoothly, when she does have some free time, she enjoys spending time with her family and exploring new locations.

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Crypto Entrepreneur

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