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Triggered by Libra and Covid-19, the large-scale spread of cryptocurrencies will take place in the coming weeks. Revealing the vastness of markets and geopolitical interests will provoke a patent war for which China is better equipped.
Facebook’s cryptocurrency Libra lit the fire. 80% of central banks are preparing their cryptocurrency (CBDC). The International Monetary Fund encourages them to prepare to license their CBDCs to private operators. Samsung is integrating a wallet for Bitcoin, Ether, Stellar, Klay and Tron as well as a decentralized app store (« Dapps ») into its new range of phones. When the time comes to vote on the U.S. Covid-19 contingency plan, Democrats want individuals to receive grants in crypto dollars to help them move faster. China is accelerating preparations for its crypto yuan to support its own emergency money policy. The massive spread of cryptocurrencies is imminent.
Economic issues become geopolitical
The target markets are considerable. It’s nothing less than replacing paper currencies, practically eliminating international transfer costs, competing with banking services from simple bank accounts to crowdfunding, and since then launching thousands of new financial services from direct payments between phones to nano-remuneration of data to help weak currencies replace and promote the economic viability of the intangible.
The geopolitical stakes are gigantic. We had already seen during the patent war between Apple and Samsung for domination of the smartphone market that their respective governments rose to the top. More recently, the Sino-US trade war has resulted in telecommunications equipment supplier Huawei being banned from the United States. We can hardly imagine the extent of a conflict that threatens the future of the banks, the monetary sovereignty of states and the balance of the dollar / euro / yuan money blocks. The next patent war is inevitable, in which the best will emerge victorious.
State patent funds are back
The table above lists companies that have at least ten patent families for blockchain and cryptocurrencies. With more than 1000 patents, Chinese supremacy is evident. Almost 200 patents are directly controlled by the state through national companies, making this portfolio the de facto leading global sovereign wealth fund. We recall that in France, Taiwan, South Korea, Japan and China, five state patent funds have already been set up in response to the hostilities of the smartphone war. This new Chinese fund, this is a first, was prepared in advance of this hostility.
Second surprise: the Chinese masters are better armed than their American counterparts. Although IBM is the world’s largest patent applicant and leader in the blockchain, it is dominated by Alibaba. GAFA including Facebook, but supporters of Libra, are largely absent from this ranking, while three of the four BATX (Baidu, Alibaba and Tencent) are present. Fourth surprise, the Europeans completely ignored the blockchain. Nokia, Ericsson and SAP have a combined barely sixty patents. So there is little doubt that the irresistible pressures of patents will push the boundaries of currency blocs around the world in favor of the yuan and at the expense of the euro.
Patent prices rise