With the news that the Trump Administration is seeking to get TikTok and WeChat off of American app stores as soon as this Sunday (clearing up a previous executive order on the topic) and operationally banning WeChat that same day (the Trump Administration is looking to give TikTok a chance until at least November 12th to not be banned, presumably in order to accelerate its acquisition by an American technology company), a rare opportunity has arisen for cryptocurrencies to bridge the gap between two systems seeking to balkanize away from each other.
The US and China are the two largest economies in the world, with a vast flow of communication and payments flowing between the two. While China has largely banned most mainstay American apps without the use of a VPN for years, this is the first time the United States has retaliated in kind to such a dramatic degree, effectively cutting off one of the largest communication bridges between the two countries with its own brand of American Internet nationalism — with scant notice.
TikTok boasts 100 million users in the United States with most of them being younger users, while WeChat has about 19 million users, mostly members of the Chinese diaspora and those connected to China through business or family.
One of the most prominent casualties is WeChat Pay, a mobile payments platform some US businesses accept and which currently hosts around 900 million users. Starting Sunday, unless something changes in this rapidly developing situation, WeChat Pay along with the rest of WeChat will be denied access to critical service providers that will make it legally difficult if not impossible to serve WeChat content across the United States.
China has already strongly indicated that it was going to retaliate to any App Store bans for WeChat or for TikTok — presumably American Internet companies and financial companies trying to capture part of the $27 trillion payments market in China will be the first to suffer, creating the potential of a downward and sudden spiral in the ability of businesses and peoples to interact digitally across both the Chinese and American systems.
Cryptocurrencies were tailor-built for this situation: with geographic nodes distributed around the world and a resilient, more censorship-proof system. As centralized companies that have won based on user convenience and network economies of scale have started to become the first casualties of a growing economic decoupling, there is a fresh, unique opportunity for cryptocurrencies to prove themselves according to their original tenets.
People and businesses will seek to interact across the world’s two largest economies: with a sudden lack of options with each country banning the others’ most popular proprietary apps, the time for decentralized payments and chat protocols is now. Being resilient to censorship, especially at the nation-state level, has seldom been more relevant or immediate.
With auditable, open-source code that can be run on multiple systems and in practice is run around the world, cryptocurrencies have so far evaded the country-by-country attitude most nations have with increasing data nationalism. Though they have been frustrated, and banned from exchanges, cryptocurrencies have maintained value and still form a viable means of exchange with nearly every country on Earth.
This ethereal, non-state tied advantage will extend even to digital versions of the dollar and the Yuan — their ties to the Chinese state or the American state will prove to be a hindrance at best in the opposite system.
US-China tensions also auger and follow growing cracks in the global Internet across the world, from India banning Chinese apps to a set of privacy laws that aim keep the personal data of users in their country of origin taking effect in jurisdictions from Brazil to Europe.
With a growing trend towards a divided Internet, open source standards and protocols like cryptocurrencies may form the only hope for individuals who want to bridge and transact with one another. The cascading economic decoupling of the United States and China and its consequences for the global Internet promise grave consequences — and opportunities for entrepreneurs looking to bridge the gap.