Jack Ma is the founder of Alibaba, a major Chinese e-commerce company. In a speech at the Bund Summit in Shanghai, Ma global regulations and expressed his support for digital currencies. He believes digital currencies are very significant for a new economy and financial system.
He called digital currency something that can create value and encouraged thinking about a new kind of economy through the power of digital currency. However, it is not exactly clear what Ma meant by »digital currency«. When we talk about digital currency, there’s many possible interpretations.
The crypto world reacts to Ma’s statements
The cryptocurrency community quickly reacted to Ma’s comments, but there were many different interpretations.
Binance CEO Changpeng »CZ« Zhao tweeted about Ma’s digital currency comments, and even Ethereum creator Vitalik Buterin joined the discussion. After CZ’s tweet, Buterin asked him about the meaning of the term »digital currency« in Ma’s statements. Zhao answered that “the meaning is up for interpretation.”
While China has very strict regulations for cryptocurrencies, Bitcoin and other cryptocurrencies are still bought and sold in the country. The biggest BTC miners are still located in China, and they mine most of the new BTC. This is a form of centralization, and it may be problematic for the crypto community in the long term. However, many also believe that the concentration of Bitcoin mining in China is not problematic and miners can migrate from China whenever they want.
Potentially, Ma was talking about central bank digital currencies (CBDCs) during the speech. There’s a competition between different countries regarding this issue, and China has been in the lead so far. China’s digital yuan, which is often called DC/EP, is in the testing phase now.
Ma called world regulations regarding banking and finance old and outdated. He also criticized The Basel Accords as something old. Basel Accords are a series of banking regulations that were last updated in 2010.
Regulation is necessary and vital in the financial world, but some regulations stifle innovation, and they are a sort of hindrance. Technology is making progress, and we need flexible rules. Technology is like a double-edged sword, and regulations should control it.
Ma considered World regulations as an obstacle in front of China’s progress and development. He thinks the rules are not suitable for the young generation and developing nations. Ma’s comments have roots in reality. Many global regulations are mostly relevant to US and European citizens. Meanwhile, many people in developing countries are underbanked, and there’s no place for them in international finance. Blockchain’s mission is revolutionizing this world and realizing democracy in its full sense. Cryptocurrency can help a lot in this context, and it can create open markets around the world.
