China Passes Crypto Law As The Country Gears Up To Launch CBDC

According to a Bloomberg report, China has added 100 tons of gold in its reserve. Economic tensions between China and the USA have not slowed down as Trump administration continue to raise taxes on Chinese goods. Value of Yuan has also hit its lowest against the dollar in a decade. Accumulation of gold by the Chinese government might be an indication for investors to shift from Yuan backed securities to safer assets.

People’s Bank of China has increased its precious metal holdings from 62.26 million ounces in July to 62.45 million in August. Gold has also been performing well as it reached a six year high. Over the past eight months, the central bank has added more than 100 tons of gold. China is not the only country accumulating Gold, Russia has also been on a buying spree as US sanctions have heavily impacted the country’s economy.

Economist at National Australia Bank Ltd., John Sharma, believes that with political and economic uncertainty prevailing central banks around the globe will look to buy gold as it provides an ideal hedge.

Can bitcoin be the solution?

Many from the crypto industry believe that US-China trade war has played a significant role in the recent spike in bitcoin’s price. As the national currency weakens, bitcoin might play the role of safe haven for the investors. Hong Kong protests have also played a significant role in China’s economic slowdown as protesters earlier announced a run on Chinese banks. It is believed that bitcoin might be the difference if a recession like 2007 returns.