The Industrial and Commercial Bank of China (ICBC) has published an analysis on cryptocurrencies. In it, he compared Bitcoin to gold and considered Ethereum to be “digital oil”. This is surprising because we are talking about one of the largest banks in the world. And Chinese at that.
ICBC writes about Bitcoin and Ethereum
As we read in the ICBC report, market demand has often driven innovation in the new technology sector. This trend also includes the development of cryptocurrencies.
The document featured a narrative that bitcoin is digital gold. Cryptocurrency, as experts emphasized, maintains this status thanks to a mathematically based consensus mechanism. It was added that despite the disappearing monetary characteristics of bitcoin, its status as an asset is strengthening. In other words, BTC is no longer money, but it is closer to modern gold, which was also a currency in the past.
In turn, the Ethereum network provides “technical power” to the market and becomes the “digital oil” capable of powering applications throughout the Web3 ecosystem. And indeed, ether, the platform's cryptocurrency, powers the entire project. Ethereum as a whole, in turn, allows developers to create and manage complex smart contracts and applications.
It is worth appreciating what was written in the report. It's not just that bankers are behind these words. It's more about the fact that ICBC is a Chinese bank. We all know that China has been reluctant towards Bitcoin and cryptocurrencies in general for years. However, it is possible that they plan to change this policy.
Stablecoins and CBDCs
It doesn't end there. The report also points to the role of stablecoins in bridging the gap between the digital currency market and the real world. Stablecoins, whose value is pegged to traditional assets such as fiat currencies, offer stability in the volatile cryptocurrency market.
ICBC said stablecoins facilitate transactions and provide a reliable way to store value, making them an essential tool for everyday financial activities and a bridge to integrating digital currencies into the global financial system. They are also an innovation in the modern monetary system.
In turn, by digitizing fiat currencies – i.e. issuing CBDCs – central banks can improve the efficiency of payment systems, reduce transaction costs and increase the effectiveness of monetary policy. Additionally, CBDCs can streamline cross-border transactions, reduce reliance on intermediaries, and ensure greater financial inclusion.
The report noted that the development and implementation of CBDC infrastructure requires careful consideration of privacy and security issues, as well as the design of appropriate regulations. Without these elements, you cannot count on the adoption of such solutions.
How to evaluate this ICBC report? Maybe this is another little breakthrough. Due to the fact that we are talking about one of the largest banks in China, which has political connections, we can conclude that the content of the document also at least partially expresses the opinion of the government. So, in a few months, will the Xi Jinping regime announce its opening to Bitcoin and Ethereum?
