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John Paul Koning
@jp_koning
, 3 tweets, 2 min read Read on Twitter
China's new digital currency will work offline, says @dgwbirch: blog.dgwbirch.com/?p=530 So if a disaster causes a communications blackout, transactions can still be made. Like regular cash.

This is a big step forward for national security. Other nations will be watching closely.
Banknotes provide some unique properties including 1) anonymity, 2) censorship resistance and 3) resilience. It seems that China's new system will (mostly) replicate the third.

Here are two blog posts on the topic of resilience:
-jpkoning.blogspot.com/2013/04/why-fe…
-jpkoning.blogspot.com/2017/06/the-ro…
What about anonymity? Yao Qian, who kickstarted China's digital currency effort, once described something called "controlled anonymity": itu.int/en/ITU-T/Works…

Users can control how much of their personal data trading parties get to see. But the state gets backdoor access.
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More from @jp_koning see all

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John Paul Koning
@jp_koning
"At the height of the Iraq & Afghanistan conflicts in 2004, the Army collected more than $480 million in U.S. cash in theater. Today, EagleCash has reduced that number to near $0." usafmcom.army.mil/News/Article-D… ht @stmdc

The US military has had some innovative payments ideas... 1/3
An occupying force wants to use a money that...
-doesn't dollarize the nation they are occupying
-can be tracked, thwarting black marketeers
-is lightweight
-if they lose, the enemy can't reuse it
Dollar bills are bulky, infiltrate local economies, and aren't enemy-resistant.
2/3
So we get innovations like EagleCash. Other ideas:
-Military Payment Certificates jpkoning.blogspot.com/2017/04/c-day-… & overprinting jpkoning.blogspot.com/2017/04/leavin… (demonetizations thwarted enemies & dollarization)
-Pogs, which were lighter than metal coins 3/3
Read 3 tweets
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John Paul Koning
@jp_koning
Early strains of American bitcoinism were motivated by glacially-slow ACH transfers. But these strains have disappeared thanks to several new US instant payments initiatives:
-MasterCard Send (2015)/Visa Direct (2016)
-Zelle (2017)
-TCH's Real Time Payments (2017)
-FedNow (2023)
International bitcoinism was less driven by slow ACH—many nations already had fast domestic payments. Still, all strains could agree that cross-border payments were awful. But new real-time initiatives dashed this consensus:
-Swift gpi (2017)
-Transferwise
With so many strains of bitcoinism being whittled away, just a few remain:
-if we can't do mainstream payments, we'll do payments for the excluded
-digital gold i.e. bitcoin isn't for paying, it's for hoarding
-bitcoin isn't a monetary technology, it's a gambling technology
Read 3 tweets
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John Paul Koning
@jp_koning
Wow Starbucks, what a great gig.

Starbucks has ~$1.6 billion in 'stored value card liabilities' i.e. the Starbucks Card. So ~6% of the firm's liabilities are comprised of coffee addicts paying 0% for the privilege of lending to their supplier.
Source: s22.q4cdn.com/869488222/file…
Few companies can get that much free financing. But don't forget breakage—balances that will never be redeemed. In 2018 Starbucks recorded breakage of $155 million,~10% of all card balances.

So the true rate at which customers are lending to Starbucks is probably closer to -10%.
Starbucks is really good at harvesting seigniorage.

Walmart's annual sales are 20x larger than Starbucks sales (~$500b vs $25b). But Walmart only has $1.9 billion in unredeemed gift card balances, not much more than Starbucks. Source: s2.q4cdn.com/056532643/file…
Read 3 tweets

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Ankit Panda
@nktpnd
Approximately 5 hours until the start of #China’s big October 1 military parade. (Will start at 10 p.m. ET for fellow East Coasters.)
Nice.
There’s a lot here.
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Martin Chorzempa 马永哲
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Quick thread on #China response to #Facebook #Libra. It is the greatest threat to Chinese fintech dominance now and they know it. CN tech firms have not yet gained many users internationally, unlike US tech. US tech has not, however, had fintech success of Alibaba/Tencent 1/n
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IndoPacific_SCS_Info
@IndoPac_Info
#China backtracked on nearly all aspects of #US trade deal - All of us that follow & know China knew that this was never going to fly. You can't negotiate with a rogue, predatory state like China. This is for the better. mobile.reuters.com/article/amp/id…
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Henrik Zeberg
@HenrikZeberg
Hi #fintwit 😎 We are approaching a watershed moment in markets. Final deflationary phase of Kondratiev's winter is about to play out. Huge implications for #EUR, #Gold, #SP500, #DXY etc. I have some new interesting followers - hence something extra in this week's #HZupdates
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Christophe Barraud🛢
@C_Barraud
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
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bloomberg.com/news/articles/…
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Andrew Erickson 艾立信
@AndrewSErickson
hearing—"#China's Worldwide #Military Expansion" is a dramatic bellwether of growing concerns in Washington & beyond.

Now online—hard-hitting arguments + many data points, some deeply-analyzed yet hard to find elsewhere in public domain:
bit.ly/HouseIC
CAPT Jim Fanell, USN Ret, former @USPacificFleet N2:

"today, the PLA Navy consists of over 330 surface ships & 66 submarines, nearly 400 combatants. As of 4 May 2018, the @USNavy consists of 283 battle force ships: 211 surface ships and 72 submarines."
bit.ly/HouseIC
"By 2030, it is estimated [by Fanell & @SCheneyPeters in their chapter in @NavalWarCollege @ChinaMaritime Studies Institute's Chinese Naval Shipbuilding volume amazon.com/Chinese-Naval-… @USNIBooks that] the PLANavy will consist of some 550 ships: 450 surface ships & 99 submarines."
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