China is supporting the decline of the US dollar as a global standard, an act sure to undermine global democratic governments. How are they doing this? Supporting Bitcoin miners is one way, but their scheme is even more sinister when viewed through a global banking lens.
China miners consume large amounts of electricity derived mostly through coal generated power as it takes thousands of individual computers to form the decentralized network necessary to perform the transaction confirmations that make crypto-currencies viable. For this, miners are compensated with their own crypto-currency.
Most public transactions in China have gone electronic anyway, as the Chinese consumer prefers the ease of use contrasted against skepticism of banks vs. US consumers who are suspicious of what seems like virtual currency contrasted against conditioned expectations American banks won't fail. US traditionalist like tactile feedback, Chinese consumers have been socialized out of reliance on tactile, or tangible evidence. A symptom of having been oppressed all these years under Mao's People's Party.
China state bank authorities love the aspect of the public using electronic currency, and why not? Trying to supply billions of people with hard currency is a daunting task unto itself, let alone gauging the money supply with a populace who likes to stuff their hard currency in their mattresses. Mattress money doesn't drive the velocity of money into the high rates of growth needed to satiate a public only willing to bow to an authoritarian non-representative government so long as they're moving closer to Western lifestyles.
Leading us to what the Chinese are doing with Crypto-currency. The task of a central bank is to control the money supply through their open-market measures, setting interest rates for banks and regulating the banking system. The latter is the key for the Crypto markets, as their desirable utility is that of being "off the grid," with no regulation. Cannabis growers in the US can bank their profits using Bitcoin, whereas the Federal Reserve blocks access to traditional banks, otherwise. Every sovereign government has at its core, a need to control its currency; how much is in circulation, the balance of payments in trading activity, etc. One only needs to look to the Southern EU countries for an example of what happens when control is lost, they loose the leverage of being able to revalue their currencies based on trade and other factors, and as a result become subject to a banker far away. Unregulated Crypto-currencies disrupts even the Euro, in this case, which is why the EU is taking up measures against its further development.
China's Sun Tzu campaign against the West has slyly relied upon the greed factor of Western commerce overlooking their quiet maliciousness, but it's there. China is a definitive authoritarian state, setting policy centrally without hardly any input from an electorate, which they fear. However, they know Western leaders are similarly pressured by those Libertarian voices in industry and elsewhere that view any constraints on trade, expansion, regulation, etc., as being something akin to Chinese Communism - ironic since the China threat has been flipped to Russian red-bating, even though Russia technically isn't Communist any longer.
As China can integrate more electronic/regulated Crypto-currency within their markets, they are able to control their populace even more than they do now. Have you heard of the civility scores being rolled out by Party stalwarts? These scores are the equivalent of credit scores in the US, but encompass other social interactions like social media use, party support, etc. Chilling, Orwellian construct only made even more powerful by electronic/Crypto-currency adoption. If you don't have a computer, a legal account and high civility score, how are you to pay for sustenance, rent or anything that may threaten the state?
The US doesn't have this luxury of control. China officials recognize the US Federal Reserve and Treasury will run into a hailstorm of objections should it step-in and control the access points, or wallets. Why it hasn't done so thus far, is curious indeed. So, by allowing those newly educated entrepreneurs to mind their computer farms and build even further the size of the crypto-market, the more they'll undermine Western Democratic governments, even as they proliferate their control and expansion into a more global presence.
US regulators have only a short amount of time to react before the political ability to do so dissolves. The lack of any conversation about this new technology among our political parties isn't a surprise. There are vast fortunes to be made, or lost, as this technology is adopted. It has the potential to be the greatest disruptor to global power structures since the advent of the airplane.