What cryptocurrency could China use to avoid tariffs?
China may consider using #Bitcoin as a way to evade the tariffs imposed by the United States. According to analysis by Arthur Hayes, founder of BitMEX, if China devalues its currency, the yuan, to counteract the tariffs, Chinese capital could flow into Bitcoin, reigniting the bull market.
*Reasons why Bitcoin could be attractive for China:*
- *History of use as a safe haven*: In previous instances, when the yuan has fallen against the dollar, Chinese investors have sought refuge in Bitcoin.
- *Wealth preservation*: Cryptocurrencies can be a way to protect wealth and move it without governmental control.
- *Independence from the traditional financial system*: Bitcoin operates in a decentralized manner, which could help China bypass capital controls and financial restrictions imposed by the tariffs.
*Advantages and challenges:*
- The devaluation of the yuan could drive up the price of Bitcoin due to increased demand for secure and decentralized assets.
- However, the current global economic environment is uncertain, and the relationship between the devaluation of the yuan and the price of Bitcoin is not direct.
*Other considerations:*
- China has been exploring the use of blockchain technologies and cryptocurrencies to improve its financial system and reduce dependence on the U.S. dollar.
- The trade relationship between China and the United States remains tense, which could lead to more innovations and adaptations in the use of cryptocurrencies
