China Reportedly Pushing McDonald’s To Accept Its Controversial CBDC

Peter Schiff scores Bitcoin ETF approval as reason why the SEC should be abolished Key takeaways Peter Schiff calls for the abolition of the SEC due to Bitcoin futures ETF approval. The gold bull describes the ETF as just another way to "gamble" on Bitcoin. Bitcoin continues to surge even as the ProShares ETF has an impressive first day. Peter Schiff, founder of Europac Funds, who is also a known gold bull and Bitcoin opponent has said that the SEC's approval of a Bitcoin ETF shows a high level of incompetence in the commission. For Schiff, the SEC should be abolished for taking a stance on Bitcoin that passed a message of the government's endorsement of the largest cryptocurrency by market cap as this was bound to help mislead more people into buying Bitcoin. "The SEC's approval of a Bitcoin futures ETF is another reason to abolish the SEC. I have no objection to the ETF. My beef is that Bitcoin pumpers will now use the approval to sucker in more buyers based on the government's supposed endorsement of Bitcoin by approving the ETF," Schiff said in a tweet. Schiff also described the newly available ETF as just a new way to speculate on Bitcoin which he considers to have no real purpose apart from being a speculative asset. "Now there's a new way to gamble on Bitcoin. Anyone buying Bitcoin is gambling. But some gamblers don't want to risk owning actual Bitcoin, so they gamble with Bitcoin futures instead. Now those who don't want to risk buying futures contracts can gamble on a Bitcoin futures ETF." However, the cryptocurrency community has welcomed the arrival of the first Bitcoin futures ETF with much fanfare. This was to be expected as it has been a long time coming -over 8 years of rejected applications. The ProShares Bitcoin Strategy ETF which launched on the NYSE yesterday with the ticker BITO performed so well that it has been billed to have the best day one of any ETF in terms of "natural" by Bloomberg's ETF Specialist Eric Balchunas. According to data from Bloomberg, the ETF hit $1 billion in trading volume on just its first day. It also ended the day with $570 million in assets. The Bitcoin market also surged on the day. Bitcoin is up 3.04% in the last 24 hours and is currently trading at around $64,012. Although in that period too it reached a high of $64,395, the current price sits just 1.3% away from the April all-time high of just under $65,000. Meanwhile, some critics feel that the ETF is likely the worst thing to happen to Bitcoin. According to the pseudonymous investor and analyst Mr. Whale, the ETF is a Wall Street run show with no benefit to people outside of the big investment circles.

Key takeaways

  • A Financial Times report indicates that China is turning up pressure on brands to make use of digital yuan.
  • While China’s CBDC has been received controversially, the country’s government insists that it protects privacy. 
  • China’s digital yuan is also billed to pose a threat to the U.S. dollar.

According to a Financial Times report, China is looking to make its Central Bank Digital Currency (CBDC) gain a whole lot of traction by pressuring global brands such as McDonald’s, Nike, and Visa operating in the country to utilize it.

The report notes that the McDonald’s fast-food chain, which is already testing the digital yuan in its operations in Shanghai, is receiving even more pressure to accept the CBDC across its locations nationwide by the time the country hosts the Winter Olympics in February 2022 – the planned time for the complete rollout of the digital currency.

Central Bank Digital Currencies are still a controversial issue, especially among cryptocurrency proponents. Most crypto-natives are critical of the entire idea of CBDCs as they have the potential to pose a threat to privacy.

Not also helping the case for CBDCs is the fact that authoritarian China is at the forefront of pushing for CBDC adoption while also cracking down on permissionless cryptocurrency. Crypto-proponents consider China’s crypto crackdown to stem majorly from a desire to make room for their biggest state surveillance tool by removing all possible competition from the way.

However, China has tried to debunk some of these claims by clarifying that its CBDC keeps users anonymous. Mu Changchun, the Director-General of China’s central bank Digital Currency Research Institute, speaking recently at DC Fintech week explained that while the digital wallet required users to provide basic identification – the most basic being a phone number, the central bank would need a warrant to access the information of any user and only if a transaction was suspected to be illicit. He also adds that the CBDC was designed to collect the least transaction information and makes it hard for users to be tracked. 

“The eCNY system collects the least transaction information compared to traditional electronic payment systems,” said Mu.

Doubts about China’s CBDC intentions aside, most central banks are also considering digitizing their currencies seriously as it comes with a lot of expected benefits. An article by Central Banking, a publication that covers news and intelligence on Central Banks policy, regulation, markets, and institutions, highlights a few of these.

For one, CBDCs are considered as a way to provide financial inclusion for those who do not have access to bank accounts. They also have the potential to lower the cost and increase the speed of domestic and international payments. The article also highlights that should China beat the U.S. in releasing a CBDC, it could give the dollar serious competition in the international market.