Western macro: "Failure" of the US dollar system, decentralization, digital currencies and their expansion

Contents

New terms and terms representing cryptocurrency, DeFi (decentralized finance), CBDC (central bank digital currency), fixed income, meta-universe, and NFT (non-homogeneous token) are constantly appearing in the global economy after a spread. the attention of global capitalists.

There are two macro stories and a bit of support after this new concept is born.

The gap between the Fed and non-US banks on monetary policy due to the financial crisis has created a loophole in the US financial system.

The vibration of global sentimental integration has become the foundation for the development of decentralized financial strategies.

Mature blockchain technology has led to the birth of cryptocurrencies, digital currencies, meta-universes, and NFTs.

The financial, technological and economic ecosystems together form the three themes of this new concept. This 2x2 combination of three themes creates a new digital blockchain ecosystem.

Crypto and DeFi assets were born when traditional financial resources were involved in blockchain and smart technology contracts. These are the core financial assets and processes of the digital blockchain industry of the future.

As the market ecosystem and blockchain merge, NFT and Metaverse were born, the market achieved the status of digital blockchain marketplace, the application market that can cope with consumers, promote business growth, and generate revenue. income.

To connect the blockchain industry ecosystem and financial infrastructure, a 'fiat currency' is needed for the payments industry and price units, which is also the main battleground for CBDCs and stability parts.

After widespread dissemination, the financial blockchain has brought about several changes: 1) the "failure" of the US post-spread process accelerated for the improvement of the cryptocurrency market 2) Rapid development of the DeFi 3 application ) The size of the stability coins has jumped Therefore, it competes with the CBDCs 4) The role of CBDC and central bank is possible to accept more and more colors.

In addition, the blockchain industry ecosystem has also seen explosive growth. The volume of NFT transactions has exceeded $ 13 billion and the global meta has become a hot topic in the real estate market. Most applications of the metaverse are currently still under study. Theoretically, this change could lead to a fundamental "transformation" involving 5G or 6G technology, blockchain technology, smart technology, cloud computing and next-generation chips, VR / AR, haptics gear and other functions.

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The new terms and terms represent cryptocurrencies, DeFi (decentralized finance), central bank digital currencies (CBDCs), stability coins, metauniverses, non-homogeneous tokens (NFTs), and more. It attracts the attention of the world market and the colors of the world capital. Financial institutions, run by the central bank, continue to increase their visibility in areas such as fixed income coins and the world's largest corporations, including the Federal Reserve. The State Reserve believes that the current maintenance of stable funds is not complete. During its business meeting in 2022, the venture capital firm also asked to support the R&D pilot project of the digital renminbi (6.3735, 0.0057, 0.09%) in a strong fixed position and harmonious. It can be seen that mid-sized global companies have actively explored how to solve the problems that blockchain technology has led to financial security.

So what is the relationship between cryptocurrencies, DeFi (decentralized finance), central bank digital currencies (CBDCs), securities, meta-universes, and NFTs? What role do central banks play in digital marketing? Why is the epidemic spreading faster than financial institutions research and develop digital currency?

The "failure" of the US dollar system, decentralization and digital currency

New terms and terms representing cryptocurrency, DeFi (decentralized finance), CBDC (central bank digital currency), fixed income, meta-universe, and NFT (non-homogeneous token) are constantly appearing in the global economy after a spread. the attention of global capitalists. Two reasons explain the birth of this new concept. In the wake of the financial crisis, the divergences in monetary policy of the Federal Reserve and non-US banks led to crises in the US economy and volatility in the sense of global integration, which became the bed of 'decentralized development. Financial advice; Mature blockchain technology has led to the birth of cryptocurrencies, digital currencies, meta-universes, and NFTs.

We noted in our October 18 statement, “The Fail” of the US Dollar Monetary System and the Reversal of US Broadband Policy, that the security of the US financial system should be doubled. The Fed and non-US central banks are the safety and security of the global economy and the basis of cyclical operations, the safety and security of US debt and the high yields of US stocks. is the basis of the US dollar's liquidity cycle.

After the financial crisis, as funding became part of the Fed's policy, the policy of the global banks began to differ. The Fed's overall QE performance comes at a time when the financial crisis is more volatile than nominal growth, indicating that key finances have been built into Fed policy since the financial crisis. Moreover, the gap between the Fed and the central bank's monetary policy, which can only be corrected by 'market-inflation-exchange rate', is a critical reason for the decline in global security after a crisis. financial. . However, as the world economy slowed for many years after the financial crisis, the monetary policy of the central bank was not excluded from the Fed, as the US dollar monetary system remains the same.

The combination of US financial support and global inflation is high due to the different discrepancies between US and non-US financial and monetary processes in the US, as "incomplete". Countries after the spread were already in financial turmoil before any possible withdrawals of US financial support. Additionally, some central banks started raising interest rates before the Fed started lowering interest rates, and the differences between the Fed's monetary policy and non-US banks are clear. This situation violates many rules of the old dollar system. For example, a time when US stocks are outperforming non-US stocks. stocks generally have a cycle of appreciation for the US dollar, and a term in US stocks outperforms non-US stocks. stocks are usually the US dollar devaluation cycle. . Although the US dollar index (96.1564, 0.2552, 0.27%) has continued to decline since March of last year, the recovery of US commodities relative to non-US commodities has been strong . Additionally, the world recognizes that the percentage of dollars in foreign currency has fallen below 60% since the spread. Or completely disconnect from the politics of the non-US central bank.

Moreover, as the gap between rich and poor widens, the United States is affected by the challenges of international integration. From the office, he began to cause a sensation for foreign trade. The “failure” of the US dollar and the evolution of global integration have become the foundation for thinking about “decentralization”. The rapid advancements in science and technology in the United States and other industries since the financial crisis have led to the recognition of "distributed" blockchain technology, which includes terms such as cryptocurrencies, digital currencies , NFT and meta-universe.

How to understand the relationship between DeFi, Stablecoins, CBDC, NFT, and Global Meta

As shown in Figure 3, the financial system, technology and ecology together form the three elements of this new concept. Crypto and DeFi assets were born when financial devices were still integrated with blockchain and smart contracts. These are the core financial assets and processes of the digital blockchain industry of the future. As the market ecosystem and blockchain merge, NFT and Metaverse were born, the market achieved the status of digital blockchain marketplace, the application market that can cope with consumers, promote business growth, and generate revenue. income. To connect the blockchain industry ecosystem and financial infrastructure, a 'fiat currency' is needed for the payments industry and price units, which is also the main battleground for CBDCs and stability parts. The financial processes, technological advancements and business ecosystems mentioned above can be considered as digital blockchain industries.

In order to better discuss the emerging trends and implications of the digital blockchain industry, key articles should be briefly presented.

Cryptocurrency is a digital asset-based blockchain technology and distribution (DLT) business that uses cryptographic techniques to keep the business safe and does not rely on government digital resources. The insecure cryptocurrency represented by Bitcoin does not close any particular asset and is not the responsibility of any entity. Strictly speaking, money is a balance sheet that functions as a medium of exchange, the stock price and a unit of measure. After 5,000 years, the form of human money has evolved from food to seashells, copper, gold and silver, personal writing and fiat money. The main reason for constant changes is that the funds received (large, easy to move, cost) do not meet the requirements of the budget, and the use of polishing technology. , metallurgy, papermaking) leading to the emergence of new funds.

DeFi is also known as Decentralized Finance, or Decentralized Finance, also known as Open Finance. Most DeFi operations are done on the Ethereum blockchain and the financial models below appeal to each other through smart contracts to provide different financial functions. Compared to traditional finance, DeFi is more open and includes DeFi without having to rely on a central agency to provide credit certification. Anyone can enter for free.

Fixed assets are securities, which refer to digital assets provided by a private company based on blockchain technology that adjusts the value of a fiat value 1: 1. Because it is based on fiat currency or other assets. fixed, it can be redeemed at any time and has a fixed price. The idea for a stable currency came from FACEBOOK's LIBRA project, which caused regulatory problems in many countries and was scrapped. However, due to the popularity of cryptocurrencies after 2020, the size of other stablecoins, which are the “measuring instrument” and “payment method” of the cryptocurrency market, has increased. In 2014, Tether Limited launched RealCoin and changed its name to USD Tether (USDT) in November, making it the first fixed-edition coin on the exchange. (DAI) and Pax Dollar (USDP) appear one after the other.

CBDC is a digital currency bank and its concept dates back to the 1980s. 1985 Nobel Laureate in Economics, James Tobin, proposed that banks, for example bank depositors, be designed to be marketable. The organization and distribution of the supervision function of China Cash (M0). As the financial regulations of every country are threatened by the rapid development of mobile Internet access over the Internet, digital payment systems, and the rise of cryptocurrencies such as Bitcoin, many mid-sized banks have started to collapse. educate about the release of digital currency from mid-sized banks. According to a BIS survey, since the end of 2020, at least 56 central banks are actively studying CBDCs.

Non-fungible tokens (NFTs), or non-fungible tokens, are a type of blockchain technology. The opposite of a cryptographic tool is a switching token. Bitcoin, for example, is a homogenized token similar to security or money in money always where two sides or a $ 200 bill from the same company are the same. Artwork - Every image and every sculpture is different.

The concept of a metauniverse first appeared in the 1992 American science fiction novel "Snow Crash". . . In March 2021, sandbox game company Roblox incorporated the concept of a global meta into its announcement and is working on creating a 3D virtual reality interface that any user can access to play, communicate, make friends and learn. in the virtual world. .

In the digital blockchain industry business diagram shown above, the blockchain financial system and the blockchain market ecology are growing rapidly in 2021. Next, let's take a look at each development.

After the spread, the improvement of the blockchain financial system was faster and stablecoins supported the interest of management.

The US dollar system's "failure" after the spread was quick to improve the cryptocurrency market.

After the spread, the market value of crypto assets increased rapidly. Specifically, by May 2021, the total market value had doubled to $ 2.5 trillion. More importantly, besides Bitcoin, other crypto assets such as Ethereum and securities are growing rapidly. Of course, since May, against the backdrop of regulatory regulation in many countries, cryptocurrency assets have been revised, reporting a decline of up to 40%, further indicating that the language of cryptocurrency is more of an asset than a currency. Of course, combined with the previous statements, it can be seen that the expansion of the market value of the cryptocurrency after the spread is not the result of significant money laundering, but rather the result of the expansion of the cryptocurrency. financial markets in the past. . The “failure” of the US dollar system.

According to IMF data (as of September 2021), the top 10 crypto assets to invest in last year in terms of Sharpe ratio are better investments than investments in US commodities, printing technology and new products. As the total market value of all crypto assets increases, more and more companies are entering the field.

Rapid development of the DeFi application

DeFi aims to reduce or eliminate any reliance on intermediary financial services such as monitoring, withdrawal, and interim payments by repeating standard finance services still using the blockchain management structure. The BIS discussed the rapid development of DeFi and its potential financial risks in its quarterly announcement in December [1]. According to the BIS distribution process, the main DeFi channels can be divided into three categories: trade, loan and investment. While we traditionally measure financial markets, DeFi's existing services in the digital blockchain industry include payment platform, exchanges, financial services, retail, investment, cash and others. works. DeFi's main focus is unreliable financial services, which means financial services are adopted through blockchain smart contracts to improve performance by shrinking the average person. However, according to current developments, big apps like USDT, Coinbase, etc. still have middlemen to deliver their services, which doesn't differ much from the money.maker is still there.

Although DeFi's development is far from reaching the best of retail, it continued to grow through 2020 and has had a major impact on the entire financial blockchain. The stability parts packaging industry has grown significantly.

Stablecoins offers the convenience of cross-platform, cross-app and user payment through the implementation of exchange rates across the entire blockchain financial system. Its life eliminates the need for DeFi traders to trade all their activities for fiat or high volatility cryptocurrencies. From 2021, as their size and packaging industry continues to grow, more and more stablecoins begin to emerge on the topic of financial management.

Stablecoins can be compared to market cap and compete with CBDCs.

In order to understand how fixed income securities affect the financial process, it is necessary to better understand the distribution and composition of fixed income securities. According to the different asset anchors and security mechanisms of Stabilitycoins, they can be divided into three categories. (1) Stable off-chain currency: A profitable fixed structure with the chain's external financial assets as a commodity. The most common are Tether (USDT) and USDC (2) On-Chain Stablecoins: Stablecoins are designed to use key crypto assets as commodities. A number of fixed coins are issued based on the value of the property and the DAI is shown. DAI is known through the Ethereum blockchain smart contract automation system and the target management rate of $ 1 using the Target Ratio Feedback Mechanism (TRFM). (3) Stable Algorithmic Currency: Uses algorithmic algorithms to change the supply and demand of Stablecoins tokens directly into assets such as US dollars at the start of a full payout. Receivables are subject to change as demand for fixed income securities increases or decreases. The most commonly used are Basis, Frax, etc.

Currently, the largest stable fund is still Tether. However, from the perspective of historical cost, based on the average value in the blockchain financial system, the exchange rate fluctuates more than the actual value, and both are stable and have similar characteristics. In December 2017, Tether was sued by the US Commodity Futures Industry for lack of transparency and other issues. Since then, dissatisfaction with the opaque USDT and Tether “stock market” announcement has continued. Tether agreed to pay the fine in March 2021 and disclose its assets on a monthly basis. This can be compared to market capitalization as it can be seen that real estate is primarily based on market capitalization.

The continued influx of stable money has sparked the interest of governments and financial regulators in many countries. For example, in the United States, since last May, the relevant financial regulators have regularly discussed stable currency.

Money managers generally find solid coins easy to obtain. Although the cost of a fixed bond is given in part by their repayment, a fixed bond like Tether is very similar to a financial instrument. In a past turmoil, a slowdown in asset holding reduced profits on the basis of a short-term financial downturn, typically affecting financial institutions in the middle to avoid running out of financial support and other activities. Because there are no central banks, the backbone of the latest financial blockchain revenues, stablecoins are very easy to achieve in the face of disappointment, which can bring assets under their control. Also, in the real world, interest rates on fixed income securities are higher than on term deposits or short term deposits. The birth of the money market in the 1970s and high interest rates were somewhat similar to today's stable currency. While the rapid growth of fixed income securities will have new financial implications, this is also why financial authorities continue to monitor fixed income securities.

From another point of view, if the size of the fixed currency against the US dollar continues to grow rapidly and their services continue to expand, it seems that the stable currency will cause the industry exchange rate to slow. digital blockchain and real world. Additionally, CBDCs and Stabilitycoins are in competition, and their competition is the channel between the digital blockchain industry and the real world.

Increasingly concerned with CBDCs and the role of central banks

The digitization of "money" is not new. The savings accounts of central banks and the people who own the banks of banks are both aware of the digital advantages. Now, CBDCs generally talk about digitizing certain bank numbers for residential areas. This raises a direct question. What role should a bank play in a CBDC liquidation business? I have a lot of questions: For example, do you want the average bank to list your clients on file? Are intermediary banks responsible for deregulating CBDCs? Account model or token model? (The standard account is similar to a traditional bank deposit. There is an account based on the user's personal information. All business functions only need to be considered. Check user data. Token model similar to Bitcoin or currently only authorized proof of ownership accepted to operate), etc.

In recent years, with the advancement of mobile internet technology and the rapid development of digital payment methods, many central banks have started to learn about financial institutions. The central bank aims to increase research on CBDCs by (1) improving financial performance, (2) reducing business risk, incurring and eliminating costs, and 3) competition in cryptocurrencies, in particular securities.

The world's first world of this result is the chrona 2020, 2020. Digital Digital DC / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP / EP the world's fastest call. Digital RMB is the Earth fastest for the fastest sales sales in the world. The digital RMB Project >> Motor of Zhoho Zhoto Zichoto has been registered at April 2020. The Old Renminbi has been named "Em0", that is , the purpose is to create a Mon Electronic funds alternate. It gets the same division network provider as a set of action of Bitcoin and Central Bank after many repeatedly, digital renins on the same hundred layers are slowly designed. Binary Operating Systems from "Central Bank Money Money" is adopted. One of the work is the user to open digital bank, but it can result in a saving money and bank account. , Drag the company's business. Therefore, the digital RMB receives the "Central business bank" bilayer system, and the essence is 100% business funding at first time.

The Fed is expected to release a free digital bank statement in the near future, the next Fed CBDCs are expected to speed up its launch. It also means that global banks have entered a competitive state in the CBDC space. for

2021 of the blockchain market ecosystem: NFT is gold, the meta-open world

In 2021, the huge competition from many NFT devices will attract the market and lead to further market growth. . According to Market Research, NFT's annual production in 2021 will exceed $ 13 billion, 400 times more than last year.

In March 2021, sandbox game company Roblox incorporated the concept of global meta into its announcement, and is working on creating a 3D virtual reality interface where anything is possible with support for virtual reality, l 'Internet of things, blockchain, AI and VR technologies. Once users have played, communicated, made friends, and learned in the virtual world, well-known companies such as Nvidia, Microsoft, Tencent, and NetEase are taking full advantage of meta-space marketing. . Most applications of the metaverse are currently still under study.

The edge of yuan is virtualization and digital technique in the real world. Design content, business system, experienced experienced users and locations should be updated many international content. However, yuanhe growth is the step by property and the final line of the device and platform of devices, sample and support support. It gives the knowledge as long as the long term. Create pictures of the real world as a technology insert technology. As an outer chain block, business system, relationship is connected to the real world and the world's virtual. And the process of personal, all users can do the creative design and correct the world. The formation of the knowledge of Yai Racing Running, creating centrifugal designs to help you develop quickly. We know that this will create the recommendations of technology. Yuan Yuxi only includes technology, including communications of human games, network and functionality, usually includes blocking technology.

Theoretically, this change could lead to a fundamental "transformation" involving 5G or 6G technology, blockchain technology, smart technology, cloud computing and next-generation chips, VR / AR, haptics gear and other functions.

[1] The DeFi risk and the vision of distribution (bis.org)