Chinese Economist Fears Global Economic Collapse on Bitcoin Adoption
If Bitcoin becomes widely recognized as a money, Qu Qiang, an economist and assistant director of Renmin University’s International Monetary Institute, predicts that society would enter a “deflationary death cycle.” Qu was questioned about the worst-case situation for the present banking system if Bitcoin becomes extensively utilized in China or throughout the world in a conversation with CGTN.
“I can show you precisely what will occur… We’re all going to die one way or another. This isn’t a prank.” Bitcoin has a finite total supply, according to Qu. As a result, it is a deflationary asset whose value will not rise in tandem with technological progress. If Bitcoin is widely adopted, society would self-destruct, like it did during the Ming Dynasty, as per Qu.
“The entire society will contract and self-destruct. That’s what occurred when the Ming dynasty ran out of silver at the conclusion of their reign.”
Qu has a vast understanding of financial instruments. He is now employed with the Beijing Bank and the China Industrial and Commercial Bank (ICBC). Despite his great understanding of the subject, his comment has received a lot of backlash.
Some crypto aficionados believe this is “state-sponsored misinformation,” while others believe it is “ultimate FUD.” According to another user, who cited Richard Von Glahn’s work, the idea is based on “dubious theoretical and empirical grounds.” “There are numerous reasons why the Ming empire fell apart, but a deflationary silver spiral is not among them.”
Qu also has no genuine understanding of the Ming Dynasty, per another commenter. In his rebuttal, he claims that the Ming Dynasty was harmed by the printing of enormous amount of paper currency, citing the British Museum’s global history.
“Nevertheless, the Ming government printed far too much paper money, resulting in hyperinflation. By 1425, paper money was only worth a seventh of its former value, and China’s usage of paper money was halted.”
Qu’s rhetoric echoes the opinion of several financial professionals about Bitcoin and the banking system. The broad adoption of Bitcoin, according to Garrick Hileman, an economic historian at the University of Cambridge, might undermine the financial system.
Brett Heath, the CEO of Metalla Royalty and Streaming, has warned that cryptocurrency would be at the forefront of the next global financial meltdown. Some others also feel that Bitcoin will fail to survive as a currency. They recognize that, like gold, widespread adoption will result in a clampdown from governments and authorities.
Walked into my hotel room and this was playing on the tv
*Proceeds to scream 😂 pic.twitter.com/6p1XHk0txh
— Hailey Lennon (@HaileyLennonBTC) May 28, 2021