Cryptocurrency

Bitcoin: The Great decoupling of the economy

In the middle of the quarantine established due to the crisis of the Coronavirus, conflicts begin to escalate within the two major world powers, China and the united States. The tension between the two nations has reached levels never seen until now, threatening to lead to a great decoupling of the economy of both countries, an event in which Bitcoin can play an important role.

What starts the uncoupling of the economy?

Probably since the fall of the Berlin Wall in 1989 that it was not a level of confrontation between the great powers, as we have witnessed in recent days between China and the united States. To be the Coronavirus, the key factor that led to, what was already a difficult relationship, the level of conflict in which you are currently located.

And is that, from the moment that the Coronavirus reached the west, the united States and China began an escalation of the discourse, with an exchange of accusations between the two countries. Indicating each other as the responsible for the birth and expansion of the Coronavirus.

So, it got to the point of hearing a high official in the chinese government, accusing the united States of having developed the virus and have it imported to China through his army. While President Donald Trump and his Secretary of State Mike Pompeo, point to a lab in Wuhan as the source of the Coronavirus.

Although none of these accusations have a solid handhold in reality. What is certain is that the situation generated by the Coronavirus is already beginning to have a major impact on the international economy. The start of what has become known as a great decoupling economic between the west and China.

Why is this happening?

This decoupling would consist of a conscious effort on the part of national governments such as Japan and the united States, to bring to the national companies that had localized their production in China.

This is to avoid a repeat of a situation like the one that occurred during this pandemic. When dozens of countries all over the world, became aware of the severe blow which meant the closure of the chinese economy on their economies.

Thus, from the medical equipment produced in China, to intermediate goods necessary for the production of goods, the disruption of global value chains focused on the production of china, caused a major disruption of economic.

What threatens the national security of a good part of the western countries. That they soon discovered that they had not had an industrial capacity sufficient national to create the respirators or face masks you need.

Therefore, and in front of this situation, we can expect in the coming months that will give you a process of uncoupling in the international economy. Weakening of this form of global economic integration achieved in the last decades of globalization.

The large separation of the economy is happening, and Bitcoin has something to say about it.

What is the role of technologies such as the Bitcoin?

However, unlike other processes of decoupling occurred in other eras of human history. On this occasion the retreat of the globalization will take place in a different context. Especially due to the existence of technologies of the Fourth Industrial Revolution, as 3D printing and Bitcoin.

In the case of 3D printing, and unlike Bitcoin, this technology can serve as a mechanism to facilitate the undocking of the international economy. Therefore, the same would enable the countries to produce all the parts needed for its manufacture locally.

Since there would be no need to outsource simple parts to other countries, so a 3D printer could produce them at a lower cost even that a worker sub paid in Southeast Asia, with higher quality and more quickly. Thus to a breakdown in the global value chains.

A different case is that of Bitcoin. Therefore, if 3D printing drives the decoupling of the economy, the Bitcoin and the Blockchain support the financial integration. Even if you give facts as the end of the special status of Hong Kong, in the commercial and financial relations with the united States. Hindering the movement of money between China and America. The Bitcoin will continue to encourage the global integration.

Although they will be a little more difficult for capital to move across borders. Through cryptocurrencies as Bitcoin, will be able to continue entering any country in the world, quickly and cheaply.

So, in the midst of the great decoupling of the economy, Bitcoin will continue to function as an integrating mechanism. That will be even more valuable to companies and organizations, of what it is today.

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About the author

Belinda Carey

Belinda Carey

A finance girl by education, Belinda has been drawn to cryptocurrencies ever since Bitcoin first emerged in the 2009. Nearly a decade later, Belinda is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies.

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