Digital Dollar Strategy
Rise of China Payment Networks and Digital Currencies. China’s emerging payment networks, together with its new digital currency, pose a greater long-term threat to U.S. national security interests globally than 5G, AI, or semiconductors, combined. If the United States acts now, it can counter China’s expansionary efforts to control emerging market money flows, and ultimately, global monetary flows. Policy and strategy recommendations are provided. In 2020, China also launched the world’s first Central Bank Digital Currency (CBDC) based on the renminbi (a “digital yuan”). China began research on its digital yuan in 2014.9 Although this effort is targeted at the M010 money supply, given its digital nature, it can eventually grow into M111 money supplies. Both Alipay and TenPay will support China’s digital yuan, making the renminbi the primary currency underpinning these Chinese-controlled payment networks.12 A digital yuan by itself would likely be confined to China, but together on growing payment networks outside of China, is a far greater threat to the U.S. dollar as the reserve currency.
U.S. policy and strategy recommendations:
1) Consider placing Tencent (TenPay and WeChat Pay) and Ant Group (Alipay) on the Entities List, requiring a license for any current or future U.S. technologies, particularly before Ant Group’s impending IPO,
2) BlockdownloadsofAlipayandWeChatPayintheUnitedStates(after careful interagency deliberations). The highly personal information that is required to be stored in Alipay and TenPay (WeChat Pay), makes TikTok look like child’s play
3)TheUnitedStatesshouldleadaconsortiumoftechnologypartnerstofasttrack the development of a better, more compelling alternative digital currency and payment network platform for developing economy central banks.
Protect the American Investor From Financing CCP’s Surveillance State, Keith ...Keith Krach
Under Secretary of State Keith Krach has championed the cause to protect the average American from unknowingly funding the Chinese Communist Party’s human rights abuses. Krach believes that “most Americans have no idea that their own money—held in pension funds, 401Ks, and brokerage accounts—is financing Chinese companies that support China’s military, security, and intelligence apparatus, as well as human rights abuses on an epic scale, such as those in Xinjiang. Through a web of subsidiaries, index funds, financial products and lack of proper disclosure, the average American investor is involuntarily supporting Chinese companies.”
As per the Credit Suisse Global Wealth Report 2020, global wealth stood at US$ 399 trillion as of the end of 2019. Most of the global wealth is primarily controlled by older men in North America and Europe.
As per BCG, the Asset Under Management (AuM) for the global asset management industry stood at US$88.7 trillion as of the end of 2019.
The pandemic found the wealth management industry dealing with margin pressure amid the popularity of passive products, on the verge of a great wealth transfer from the Baby Boomers to the younger generations, a rising share of women’s wealth, and increasing regulatory pressure. Revenue from beta is quickly diminishing due to the popularity of passive products. The focus is shifting from margin to increasing AUM.
As per Credit Suisse Global Wealth Report 2020, global wealth decreased by US$ 17 trillion between January and March of 2020. Recovery in the capital markets Q2 onwards led to the recovery of household wealth in Q2 to the levels of the end of 2019. Though the loss of growth represents a more than US$7 trillion loss from expected wealth levels by the end of the first half of 2020. Lower economic activity, lower consumption, and lower investments by both households and corporates likely to restrain household wealth growth for many coming years. The growth rate may not recover to pre-pandemic levels before the end of 2021. Global wealth per adult decreased by 0.4% in the first half of 2020. China is the biggest gainer and Latin America along with Africa are the greatest losers.
Though low-interest-rate environment, making time deposits less attractive, likely to boost funds flows to capital markets and demand for wealth management services.
At the same time, social distancing is forcing digital adoption in wealth management. Apart from that, the great wealth transfer will mean that the wealth management sector needs a paradigm shift in their client engagements. The expectations of tech-savvy millennials are very much different from the older generations. Instant gratification, higher involvement in the process, and constant monitoring are some of the features Millennials expect.
Micro-Investment platforms and Online Brokers are expected to be immensely beneficial as tech-savvy Millennials control more and more wealth. Self-service platforms that specialize in passive products (MF, ETF) are especially lucrative.
Hybrid services that combine human touch with tech efficiency will likely to become mainstream as wealth management firms push for cost-cutting and younger generations control more and more wealth.
As many traditional wealth management firms will look to increase their digital capabilities, WealthTech firms with proven business models are expected to be seen as attractive acquisition targets.
IMAP closed 112 deals worth more than $14.7 billion during the first half of 2021. The strong rebound in market
activity that began in Q4 of 2020 carried over well into Q1 of this year and although the rate of deal making
returned to more normal pre-COVID levels in Q2, IMAP partners around the world have full pipelines and many
are expecting to have a record year. IMAP partners in North America and several European countries in particular
are experiencing the strongest market environment and most new deal flow in over a decade. In the first half
deals were closed across 14 different sectors, with Technology, Business Services, Healthcare, Industrials, and
Consumer Retail the most represented. Twenty-nine percent of IMAP deals were cross-border.
China has emerged on the world stage with a brace of global tech companies that are innovative and competitive. And increasingly, their successes are being studied and replicated in other markets.
This third edition of the China Internet Report delves deeper and broader into China’s drive to be a global leader for innovation, and examines the opportunities and challenges for its technology-led industrial transformation.
1. Global Inflation - https://www.vox.com/2021/11/24/22799217/global-inflation-us-eu-germany-uk or Inflation has risen around the world, but the U.S. has seen one of the biggest increases - https://www.pewresearch.org/fact-tank/2021/11/24/inflation-has-risen-around-the-world-but-the-u-s-has-seen-one-of-the-biggest-increases/
2. GDP risk - https://www.globaldata.com/globaldata-revises-china-gdp-growth-back-sluggish-real-estate-activity-coal-shortages/
3. New variants - https://www.bbc.com/news/world-59442129
4. Housing - https://blackburnnews.com/windsor/windsor-news/2021/11/26/ontario-invites-mayors-housing-summit/
5. Stock Market - https://finance.yahoo.com/news/stock-market-news-live-updates-november-26-2021-125443465.html
6. ESG - https://sustainablebiz.ca/newsletter/sustainable-biz-canada-november-26-2021/
7. Geopolitical Risks - https://www.geopoliticalmonitor.com/section/situation-reports/
8. Debt - https://www.almendron.com/tribuna/is-sovereign-debt-impeding-africas-covid-19-recovery/
9. Circular economy - https://www.engineeringnews.co.za/article/csirs-initial-circular-economy-study-shows-potential-to-create-economy-wide-value-2021-11-26
10. Automation - https://www.helpnetsecurity.com/2021/11/26/investments-automation/
Diving deep into literally millions of interactions and conversations with different networks such as Facebook, Twitter and Instagram, blogs, forums and news sites in order to bring you analytical info about how social media affects different sectors like:Sharing Economy, Banking and Finance, Ecommerce, Telecom and Fintech.
Protect the American Investor From Financing CCP’s Surveillance State, Keith ...Keith Krach
Under Secretary of State Keith Krach has championed the cause to protect the average American from unknowingly funding the Chinese Communist Party’s human rights abuses. Krach believes that “most Americans have no idea that their own money—held in pension funds, 401Ks, and brokerage accounts—is financing Chinese companies that support China’s military, security, and intelligence apparatus, as well as human rights abuses on an epic scale, such as those in Xinjiang. Through a web of subsidiaries, index funds, financial products and lack of proper disclosure, the average American investor is involuntarily supporting Chinese companies.”
As per the Credit Suisse Global Wealth Report 2020, global wealth stood at US$ 399 trillion as of the end of 2019. Most of the global wealth is primarily controlled by older men in North America and Europe.
As per BCG, the Asset Under Management (AuM) for the global asset management industry stood at US$88.7 trillion as of the end of 2019.
The pandemic found the wealth management industry dealing with margin pressure amid the popularity of passive products, on the verge of a great wealth transfer from the Baby Boomers to the younger generations, a rising share of women’s wealth, and increasing regulatory pressure. Revenue from beta is quickly diminishing due to the popularity of passive products. The focus is shifting from margin to increasing AUM.
As per Credit Suisse Global Wealth Report 2020, global wealth decreased by US$ 17 trillion between January and March of 2020. Recovery in the capital markets Q2 onwards led to the recovery of household wealth in Q2 to the levels of the end of 2019. Though the loss of growth represents a more than US$7 trillion loss from expected wealth levels by the end of the first half of 2020. Lower economic activity, lower consumption, and lower investments by both households and corporates likely to restrain household wealth growth for many coming years. The growth rate may not recover to pre-pandemic levels before the end of 2021. Global wealth per adult decreased by 0.4% in the first half of 2020. China is the biggest gainer and Latin America along with Africa are the greatest losers.
Though low-interest-rate environment, making time deposits less attractive, likely to boost funds flows to capital markets and demand for wealth management services.
At the same time, social distancing is forcing digital adoption in wealth management. Apart from that, the great wealth transfer will mean that the wealth management sector needs a paradigm shift in their client engagements. The expectations of tech-savvy millennials are very much different from the older generations. Instant gratification, higher involvement in the process, and constant monitoring are some of the features Millennials expect.
Micro-Investment platforms and Online Brokers are expected to be immensely beneficial as tech-savvy Millennials control more and more wealth. Self-service platforms that specialize in passive products (MF, ETF) are especially lucrative.
Hybrid services that combine human touch with tech efficiency will likely to become mainstream as wealth management firms push for cost-cutting and younger generations control more and more wealth.
As many traditional wealth management firms will look to increase their digital capabilities, WealthTech firms with proven business models are expected to be seen as attractive acquisition targets.
IMAP closed 112 deals worth more than $14.7 billion during the first half of 2021. The strong rebound in market
activity that began in Q4 of 2020 carried over well into Q1 of this year and although the rate of deal making
returned to more normal pre-COVID levels in Q2, IMAP partners around the world have full pipelines and many
are expecting to have a record year. IMAP partners in North America and several European countries in particular
are experiencing the strongest market environment and most new deal flow in over a decade. In the first half
deals were closed across 14 different sectors, with Technology, Business Services, Healthcare, Industrials, and
Consumer Retail the most represented. Twenty-nine percent of IMAP deals were cross-border.
China has emerged on the world stage with a brace of global tech companies that are innovative and competitive. And increasingly, their successes are being studied and replicated in other markets.
This third edition of the China Internet Report delves deeper and broader into China’s drive to be a global leader for innovation, and examines the opportunities and challenges for its technology-led industrial transformation.
1. Global Inflation - https://www.vox.com/2021/11/24/22799217/global-inflation-us-eu-germany-uk or Inflation has risen around the world, but the U.S. has seen one of the biggest increases - https://www.pewresearch.org/fact-tank/2021/11/24/inflation-has-risen-around-the-world-but-the-u-s-has-seen-one-of-the-biggest-increases/
2. GDP risk - https://www.globaldata.com/globaldata-revises-china-gdp-growth-back-sluggish-real-estate-activity-coal-shortages/
3. New variants - https://www.bbc.com/news/world-59442129
4. Housing - https://blackburnnews.com/windsor/windsor-news/2021/11/26/ontario-invites-mayors-housing-summit/
5. Stock Market - https://finance.yahoo.com/news/stock-market-news-live-updates-november-26-2021-125443465.html
6. ESG - https://sustainablebiz.ca/newsletter/sustainable-biz-canada-november-26-2021/
7. Geopolitical Risks - https://www.geopoliticalmonitor.com/section/situation-reports/
8. Debt - https://www.almendron.com/tribuna/is-sovereign-debt-impeding-africas-covid-19-recovery/
9. Circular economy - https://www.engineeringnews.co.za/article/csirs-initial-circular-economy-study-shows-potential-to-create-economy-wide-value-2021-11-26
10. Automation - https://www.helpnetsecurity.com/2021/11/26/investments-automation/
Diving deep into literally millions of interactions and conversations with different networks such as Facebook, Twitter and Instagram, blogs, forums and news sites in order to bring you analytical info about how social media affects different sectors like:Sharing Economy, Banking and Finance, Ecommerce, Telecom and Fintech.
Driving forces: Over the next 10 years the world of work is set to rapidly change, with the World Economic Forum predicting that disruptive changes to business models will have a profound impact on the employment landscape in the coming years
CIO Council's White Paper: Networks of the FutureNeil McDonnell
The Innovation Committee of the Chief Information Officers Council put out this white paper to provide Federal Government CIOs insight into the next generation of network technologies and how they will impact agencies.
Neil McDonnell and the GovCon Chamber of Commerce is bringing this document to industry as part of our commitment to find and share information that will help small businesses better prepare to serve the federal market.
Can cloud computing survive the NSA disclosuresJason Fernandes
Over the past several months, the disclosures by former National Security Agency (NSA) contractor Edward Snowden have hit internet companies hard. Lately, there has been a steady migration to the cloud services. People were increasingly comfortable with storing important documents online. The NSA disclosures have stopped this trend in its tracks, and could possibly lead to its reversal.
From BitPagos to BiM, Latin American innovators are taking advantage of high mobile penetration, a strong middle class and a unified culture to capture new opportunities in the digital economy.
Defin
ing artificial intelligence is no easy matter. Since the mid
-
20th century when it
was first
recognized
as a specific field of research, AI has always been envisioned as
an evolving boundary, rather than a settled research field. Fundamentally, it refers
to
a programme whose ambitious objective is to understand and reproduce human
cognition; creating cognitive processes comparable to those found in human beings.
Therefore, we are naturally dealing with a wide scope here, both in terms of the
technical proced
ures that can be employed and the various disciplines that can be
called upon: mathematics, information technology, cognitive sciences, etc. There is
a great variety of approaches when it comes to AI: ontological, reinforcement
learning, adversarial learni
ng and neural networks, to name just a few. Most of them
have been known for decades and many of the algorithms used today were
developed in the ’60s and ’70s.
Since the 1956 Dartmouth conference, artificial intelligence has alternated between
periods of
great enthusiasm and disillusionment, impressive progress and frustrating
failures. Yet, it has relentlessly pushed back the limits of what was only thought to
be achievable by human beings. Along the way, AI research has achieved significant
successes: o
utperforming human beings in complex games (chess, Go),
understanding natural language, etc. It has also played a critical role in the history
of mathematics and information technology. Consider how many softwares that we
now take for granted once represen
ted a major breakthrough in AI: chess game
apps, online translation programmes, etc
Digital Dollar Strategy Powerpoint- Krach Touw (Public Version)Keith Krach
Digital Dollar Strategy
Rise of China Payment Networks and Digital Currencies. China’s emerging payment networks, together with its new digital currency, pose a greater long-term threat to U.S. national security interests globally than 5G, AI, or semiconductors, combined. If the United States acts now, it can counter China’s expansionary efforts to control emerging market money flows, and ultimately, global monetary flows. Policy and strategy recommendations are provided. In 2020, China also launched the world’s first Central Bank Digital Currency (CBDC) based on the renminbi (a “digital yuan”). China began research on its digital yuan in 2014.9 Although this effort is targeted at the M010 money supply, given its digital nature, it can eventually grow into M111 money supplies. Both Alipay and TenPay will support China’s digital yuan, making the renminbi the primary currency underpinning these Chinese-controlled payment networks.12 A digital yuan by itself would likely be confined to China, but together on growing payment networks outside of China, is a far greater threat to the U.S. dollar as the reserve currency.
U.S. policy and strategy recommendations:
1) Consider placing Tencent (TenPay and WeChat Pay) and Ant Group (Alipay) on the Entities List, requiring a license for any current or future U.S. technologies, particularly before Ant Group’s impending IPO,
2) BlockdownloadsofAlipayandWeChatPayintheUnitedStates(after careful interagency deliberations). The highly personal information that is required to be stored in Alipay and TenPay (WeChat Pay), makes TikTok look like child’s play
3)TheUnitedStatesshouldleadaconsortiumoftechnologypartnerstofasttrack the development of a better, more compelling alternative digital currency and payment network platform for developing economy central banks.
Driving forces: Over the next 10 years the world of work is set to rapidly change, with the World Economic Forum predicting that disruptive changes to business models will have a profound impact on the employment landscape in the coming years
CIO Council's White Paper: Networks of the FutureNeil McDonnell
The Innovation Committee of the Chief Information Officers Council put out this white paper to provide Federal Government CIOs insight into the next generation of network technologies and how they will impact agencies.
Neil McDonnell and the GovCon Chamber of Commerce is bringing this document to industry as part of our commitment to find and share information that will help small businesses better prepare to serve the federal market.
Can cloud computing survive the NSA disclosuresJason Fernandes
Over the past several months, the disclosures by former National Security Agency (NSA) contractor Edward Snowden have hit internet companies hard. Lately, there has been a steady migration to the cloud services. People were increasingly comfortable with storing important documents online. The NSA disclosures have stopped this trend in its tracks, and could possibly lead to its reversal.
From BitPagos to BiM, Latin American innovators are taking advantage of high mobile penetration, a strong middle class and a unified culture to capture new opportunities in the digital economy.
Defin
ing artificial intelligence is no easy matter. Since the mid
-
20th century when it
was first
recognized
as a specific field of research, AI has always been envisioned as
an evolving boundary, rather than a settled research field. Fundamentally, it refers
to
a programme whose ambitious objective is to understand and reproduce human
cognition; creating cognitive processes comparable to those found in human beings.
Therefore, we are naturally dealing with a wide scope here, both in terms of the
technical proced
ures that can be employed and the various disciplines that can be
called upon: mathematics, information technology, cognitive sciences, etc. There is
a great variety of approaches when it comes to AI: ontological, reinforcement
learning, adversarial learni
ng and neural networks, to name just a few. Most of them
have been known for decades and many of the algorithms used today were
developed in the ’60s and ’70s.
Since the 1956 Dartmouth conference, artificial intelligence has alternated between
periods of
great enthusiasm and disillusionment, impressive progress and frustrating
failures. Yet, it has relentlessly pushed back the limits of what was only thought to
be achievable by human beings. Along the way, AI research has achieved significant
successes: o
utperforming human beings in complex games (chess, Go),
understanding natural language, etc. It has also played a critical role in the history
of mathematics and information technology. Consider how many softwares that we
now take for granted once represen
ted a major breakthrough in AI: chess game
apps, online translation programmes, etc
Digital Dollar Strategy Powerpoint- Krach Touw (Public Version)Keith Krach
Digital Dollar Strategy
Rise of China Payment Networks and Digital Currencies. China’s emerging payment networks, together with its new digital currency, pose a greater long-term threat to U.S. national security interests globally than 5G, AI, or semiconductors, combined. If the United States acts now, it can counter China’s expansionary efforts to control emerging market money flows, and ultimately, global monetary flows. Policy and strategy recommendations are provided. In 2020, China also launched the world’s first Central Bank Digital Currency (CBDC) based on the renminbi (a “digital yuan”). China began research on its digital yuan in 2014.9 Although this effort is targeted at the M010 money supply, given its digital nature, it can eventually grow into M111 money supplies. Both Alipay and TenPay will support China’s digital yuan, making the renminbi the primary currency underpinning these Chinese-controlled payment networks.12 A digital yuan by itself would likely be confined to China, but together on growing payment networks outside of China, is a far greater threat to the U.S. dollar as the reserve currency.
U.S. policy and strategy recommendations:
1) Consider placing Tencent (TenPay and WeChat Pay) and Ant Group (Alipay) on the Entities List, requiring a license for any current or future U.S. technologies, particularly before Ant Group’s impending IPO,
2) BlockdownloadsofAlipayandWeChatPayintheUnitedStates(after careful interagency deliberations). The highly personal information that is required to be stored in Alipay and TenPay (WeChat Pay), makes TikTok look like child’s play
3)TheUnitedStatesshouldleadaconsortiumoftechnologypartnerstofasttrack the development of a better, more compelling alternative digital currency and payment network platform for developing economy central banks.
Disruptions and Digital Banking Trends by Luigi Wewege, Jeo Lee and Michael C...Luigi Wewege
Journal of Applied Finance & Banking - Scientific Press International
Technology in financial services, or ‘fintech’, entrants and technology-media-telecommunication companies have rapidly evolved into the traditional banking industry, offering customer-centric, faster-easier-convenient-free, financial services. Digital-only-neo-banks focus on payment, money transfer, lending for small-medium-businesses, and microfinancing, facilitating technological innovation such as digital wallet and messaging peer-to-peer transactions. Fintech banks generally lack scale and trust, unregulated in some cases with credit or liquidity risk exposure, from the customers perspective. Fintechs are increasingly perceived as a partner for a source of value creation through technological advances and innovations to large, traditional, and incumbent banks moving to accelerated digital transformation. All innovative technologies which have laid the groundwork for major disruption in the current digital banking revolution, set forth unimagined trajectory of collaboration and consolidation as fintech industry matures. This paper updates the digital banking transformation in fintechs and incumbent banking institutions to show that access to future fintech trends will grow significantly in coming years. The combined findings suggest that digitalised-mobile-banking transitions emphasize the capabilities of banking infrastructure for data sharing, connectivity, stability and cybersecurity and standardisation of internal and external APIs as progress continues within the regulatory framework of data protection as part of the privacy act and open-banking directives.
The Rise of FinTech_ How Is It Revolutionizing The Future of Finance_.pdfAnil
The evolution of FinTech (Financial Technology) drastically transformed the way traditional financial institutions – insurers and banks functioned. To thrive, global companies, retailers, and large tech giants realized the need to reinvent the value chain of financial services.
China is the second-largest source of “unicorns” in the world. We expect most China unicorns to come from the Auto, FinTech, Internet, Healthcare and Tech Hard-ware sectors. Hong Kong and China exchanges are getting ready for the next big wave. Following the US, China is the second-largest source of “unicorns” (commonly defined as start-up companies with valuations of >US$1 bn).
The Internet of Things: A Prime Opportunity for Merchant AcquirersCognizant
For merchants, the Internet of Things’ vast connectivity makes it easy for consumers to purchase within an environment that is intuitive, familiar and comfortable. For acquirers, there is the opportunity to provide various interfaces for accepting payments from all connected touchpoints -- creating an omnichannel experience for customers.
China Internet Report 2017 by Edith YeungEdith Yeung
The China Internet Report covers topics including:
China vs. US internet by the numbers, China market size, top China startup cities, venture capital, smartphone landscape, major Chinese internet trends including messaging, mobile payment, Cryptocurrency, shopping, bike sharing, live streaming. gaming, eSport, artificial intelligence and education. This guide is intended to give you basic information about Chinese internet landscape.
Emerging Technology, Shiny Objects & The Future of Media - iSummit - Fred SteubeFred Steube
The rapid pace of digital innovation has media companies scrambling to figure out which new emerging technology will be a hit with consumers and how to reach these consumers on these many new channels. Traditional media like print, TV, radio, and outdoor media will need to take advantage of wearables, beacons, digital wallets, augmented reality, etc and will have to respond to disruptive technology to remain competitive in an increasingly dynamic business landscape.
Deep Dive into VC Funding in China- Click VenturesFrederick Ng
Where VC Funding is going in China? Sectors where VC funding is going? What do you need to know about partnering or investing in a Chinese Fintech company?
From our local office at Beijing, we are glad to release an introduction to the Chinese Internet Market.
With the chinese economy still growing fast, the internet market has experimented an incredible growth in recent years. And what is more promising, every analysis foresee what is seems to be an unprecedented boom for the years to come.
Webinar: The Future of FinTech: Insights for 2021 | IntellectsoftIntellectsoft
FinTech companies and startups' changing dynamic forces them to be more adaptive to stay afloat or pivot during these difficult times.
Financial institutions from all over the world change the way people practice their finance. These are all credited to the growth of new digital trends such as Cryptocurrency, Contactless, Trading.
The Intellectsoft webinar "The Future of FinTech: Insights, Trends, and Use Cases Defining the Industry in 2021" offers fintech visionaries access to the unique resources for accelerating the infusion of digital finance in their business.
Watch the webinar to:
- Explore global fintech trends every leader should look out for in 2021
- Reveal how to make your fintech business stand out in the post-digital world
- Discover today's featured examples of Intellectsoft clients' technology solutions that can help you provide better and more efficient services
- Discuss how to evolve in 2021 using emerging technologies and more efficient solutions
Learn more about our financial software development here: https://www.intellectsoft.net/solutions/financial-software-development-services
Mobile Wars: Fintech vs. Banks... and Big Tech in AmbushKatia Bazzocchi
Pure mobile banks gain users daily, as they benefit from accessible smartphone technology. Millenials are the principal users of mobile banks, and will soon be followed by Generation Z. As consumer expectations continue to be shaped by new technology and innovative consumer affairs, a full mobile strategy is key for traditional banks to maintain market share.
Similar to Digital Dollar Strategy Paper Krach Touw (Public Version) (20)
The Global Economic Security Strategy (GESS) Public VersionKeith Krach
The Global Economic Security Strategy (GESS) contained in these pages harnesses powerful areas of competitive advantage, including the innovation and resources of our private sector; strong partnerships with friends and allies, and the moral high ground of our American values and optimism. It provides an integrated plan to leverage, grow and amplify these strengths through three distinct pillars of action.
The first pillar of the Global Economic Security Strategy
is to turbocharge our economic competitiveness and innovation to ensure our economic security. If we cannot do both in tandem, we will no longer be the global leader that we are now. The pillar begins by describing how we will turbocharge economic competitiveness by continuing to invest in the American worker, increase access to capital, accelerate the nation’s digital transformation, rebuild our industrial base, and extend our lead in research and development.
The second pillar details how we must safeguard America’s assets, which have long been under attack from our strategic adversaries. This involves protecting our country’s technology, intellectual property, investment resources, open markets, and civil society institutions, and strengthening our supply chains to prevent being overly and adversely dependent on any one country. Finally, the pillar outlines the importance of focusing on critical innovation sectors so that we can win the race for leadership in areas vital to our national security.
The third pillar is to form a network of trusted partners comprised of like-minded countries, companies, and civil society institutions. This Economic Prosperity Network (EPN) is built on the idea that strong partnerships advance shared prosperity. Through economic diplomacy, the EPN will harness the innovation, resources and synergies of its members into an equitable and unifying geo-economic network that enables multiple areas of economic collaboration. These partnerships are grounded in a set of shared principles that form the basis of trust and prosperity: reciprocity, integrity, accountability, transparency, and respect for the rule of law, property, and sovereignty. By leading this freedom coalition, the United States and our partners will have strength in numbers to confront any nation that seeks to undermine our prosperity and basic freedoms.
The GESS recognizes that the world wants and needs America to lead, but that we cannot confront the challenges of our time alone. We must build a coalition of economic partners and private sector companies to secure the foundations of free and open societies at home and throughout the world.
Global Tech Security Commission Overview Keith Krach
Global Tech Security Commission Overview
Mission
Develop the definitive global tech security strategy to safeguard freedom through the adoption of trusted technology by designing a set of sector specific strategies as well as an integrated approach that democracies can adopt to counter techno-authoritarianism.
Objective
The core objective of the Commission is to assemble a network of global multi-sector leaders to create a global tech security strategy to safeguard freedom through the adoption of trusted technology. The Commission will publish a groundbreaking report that serves as the preeminent policy playbook for global tech security that rallies and unifies countries, companies, and civil society and results in a global trust network that safeguards freedom.
The final Commission report will articulate a common strategic vision for the future of technology and its relationship to liberal democratic principles among like-minded states and actors. The report will offer concrete steps for democratic countries to collectively develop and promote technological advances that bolster democratic governance and individual rights, thereby outflanking rather than reacting to China’s future techno-authoritarian efforts.
Goals
1. Design a set of sector specific strategies in 12 technology industry verticals and recommend a set of policy actions for the U.S. and like-minded nations to proactively counter threats posed authoritarian regimes.
2. Integrate a comprehensive set of industry strategies designed to advance global economic security by expanding technological collaboration between allies.
3. Build a unified global network of companies, institutions, industry leaders, and countries, committed to trust standards and principles.
4. Establish a meaningful set of trust standards to create a level playing field, and end abuse by authoritarian regimes.
5. Catalyze the widespread adoption of trusted technologies to advance freedom
Global Tech Security Commissioner's Playbook Keith Krach
Global Tech Security Commissioner's Playbook
Global Tech Security Commission Structure & Process
Technology
Semiconductors AI
5G and IoT Space
Quantum Biotech
Cloud Computing Robotics
Clean Energy Hypersonics
Strategies
Diplomacy
Capital Markets
Supply Chains
Export Controls
Education
IP Protection
Lawfare
Board Strategy
Intelligence
Mil-Civil Fusion
Micro Lending
Development Banks
Digital Currency Auto. Vehicles
Countries
Japan UK Germany
Canada USA South Korea Finland France Switzerland
Taiwan India Australia
Sweden Israel Netherlands
Global Tech Security Commission Honorary Co-Chairs PlaybookKeith Krach
Global Tech Security Commission Honorary Co-Chairs Playbook
Global Tech Security Commission -Build a Network of Multi-Sector Leaders to Create and Implement a Global Tech Security Strategy to Safeguard Freedom Through the Adoption of Trusted
Technology
Semiconductors AI
5G and IoT Space
Quantum Biotech
Cloud Computing Robotics
Clean Energy Hypersonics
Strategies
Diplomacy
Capital Markets
Supply Chains
Export Controls
Education
IP Protection
Lawfare
Board Strategy
Intelligence
Mil-Civil Fusion
Micro Lending
Development Banks
Digital Currency Auto. Vehicles
Countries
Japan UK Germany
Canada USA South Korea Finland France Switzerland
Taiwan India Australia
Sweden Israel Netherlands
Global Tech Security Commission Structure & Process Keith Krach
Global Tech Security Commission Structure & Process
Technology
Semiconductors AI
5G and IoT Space
Quantum Biotech
Cloud Computing Robotics
Clean Energy Hypersonics
Strategies
Diplomacy
Capital Markets
Supply Chains
Export Controls
Education
IP Protection
Lawfare
Board Strategy
Intelligence
Mil-Civil Fusion
Micro Lending
Development Banks
Digital Currency Auto. Vehicles
Countries
Japan UK Germany
Canada USA South Korea Finland France Switzerland
Taiwan India Australia
Sweden Israel Netherlands
Global Tech Security Commission Detailed OverviewKeith Krach
Global Tech Security Commission -Build a Network of Multi-Sector Leaders to Create and Implement a Global Tech Security Strategy to Safeguard Freedom Through the Adoption of Trusted
The Strategy for Creating a Movement Against China’s Ideology of Genocide to...Keith Krach
The Strategy for Creating a Movement Against
China’s Ideology of Genocide to Maintain International Order
The world has a moral imperative to end the Xinjiang genocide because it fits the definition of punishable genocide established by the United Nations at the Convention on the Prevention and Punishment of Genocide in 1948 in response to the Nazi atrocities. With no consequences, there can be no international order.
With China’s denial despite all the evidence to the contrary, Under Secretary of State Krach determined that the government could not be effective alone in ending China’s crimes against humanity. The strategy would require an all-of-society approach in the form of a movement and would necessitate Krach being the first US official to label the Xingjian atrocities as genocide which he did in national TV broadcast on the fourth of July 2020.
Krach used the “Trust Doctrine” as the platform to create a movement the CCP’s human rights abuse that advocates shining the light of transparency and calling on—government, business, universities, pension funds, stock exchanges, financial institutions, the press, and civil society—asserting their moral responsibility and fiduciary duty to establish governance principles to prevent enabling or investing in any entities that facilitate human rights abuses. He also sent letters to all corporate CEOs, university governing boards, and leaders of civil society groups, and called for divestment.
The Athenai Institute, a student-founded nonprofit comprised of College Republicans and Democrats, has responded to this call for divestment by organizing a grassroots movement that has rapidly spread across thirty college campuses that are pressing universities to \vote with their wallets.
Washington Examiner: “Krach laid the groundwork for the Uyghur genocide university divestment movement and was the first public official in the world to refer to the persecution of Uyghurs in China as a genocide, an act of conscience that has stood the test of time and which gave hope to many in the Uyghur community that justice will be done.”
The Trust Doctrine as a Policy Framework for Maintaining International Order;...Keith Krach
The Trust Doctrine as a Policy Framework
for Maintaining International Order
Trust is a precondition for democracy and lasting peace. For that reason, Under Secretary of State Keith Krach was nominated for the 2022 Nobel Peace Prize for the development of the “Trust Doctrine” and its deployment to defend against technological authoritarianism, safeguard global economic security, preserve democracy in Taiwan, and protect human rights.
With the rise of authoritarianism, the Trust Doctrine, his nominators asserted, represents not just the success of these efforts toward peace, but the possibilities for an all-inclusive framework by which peace may be achieved across multiple sectors of human life.
This doctrine means every peaceful relationship must ultimately be based on trust, which in turn requires a partnership to be founded on the firm foundation of integrity, accountability, transparency, property rights, national sovereignty, reciprocity, respect for the rule of law, the environment, independent press, and human rights. These are things that the free world honors and authoritarian regimes do not. Instead, they use them to their strategic advantage by utilizing the “Power Principle,” which forgoes the necessity of shared values, and operates by coercion, co-option, concealment, bellicosity, and threats.
In one jujitsu move, the “Trust Doctrine” weaponizes the trust principles that we honor, and China doesn’t and instead of letting them abuse our trust, turns the tables by using those very principles that protect freedom against them.
Dean of Georgetown Law School William Treanor observed, “What Under Secretary of State Krach did running U.S. economic diplomacy and building the Clean Network Alliance of Democracies is of the utmost importance especially now. His use of the ‘Trust Principle’ to defend against technological authoritarianism, safeguard global economic security, preserve democracy in Taiwan, and protect human rights resonates with our core values. That’s why it’s so inspiring.”
Safeguarding the Climate, Energy Security & Human Rights by Preventing ESG In...Keith Krach
Safeguarding the Climate, Energy Security & Human Rights by Preventing ESG Investment in China’s Dominant Dirty Solar
The explosive growth of ESG investment in China’s domination of the Solar Industry which utilizes Uyghur slave labor and dirty coal-fired power plants has created a growing consciousness that unfettered investment in China’s economy has serious consequences for America’s economic and national security. Investors, consumers, and voters rightly want “clean” supply chains with clean labor practices for clean energy, but the ESG investment industry has failed to deliver them.
To address this massive issue, Krach and his team determined that the Clean Capital Markets Strategy necessitated a multi-faceted campaign involving Wall Street, major corporations, civil society, American universities, and consumers. When it came to ESG, this strategy presented one of the most comprehensive models for addressing the inconsistent application of ESG standards—not just on solar, but every industry under the sun. Clean Capital Markets Strategy consisted of four prongs: (1) calling out the CCP’s egregious behavior; (2) unveiling China’s financial ruses; (3) championing investors; (4) taking action.
Rather than replicating the convoluted EU regulatory approach that likely will serve as a brake on innovation and investment, U.S. policymakers are looking to the Clean Capital Markets approach. As part of his broad push to protect the average American investor from unknowingly financing the CCP’s malign intentions, the Clean Capital Markets Playbook addresses the distortions that have arisen under the current system. The playbook’s targeted, common-sense recommendations also have the added benefit of leveling the playing field for companies that play by the rules, do not benefit from slave labor, or have the backing of a predatory party-state.
As Uyghur advocate Nury Turkel observed, “Investors, consumers, and voters want a ‘clean’ supply chain for clean energy, but the ESG investment industry has failed to deliver.” Turkel has called Krach’s approach “groundbreaking.”
Wharton Business School Case study; Here Comes the Sun: ESG and Dirty Solar Supply Chains
The Strategy for Preserving Democracy in Taiwan as a Lynchpin for Internatio...Keith Krach
The Strategy for Preserving Democracy in Taiwan
as a Lynchpin for International Order
To the free world, a peaceful Taiwan is a lynchpin of democracy and a role model of freedom. To China’s Xi Jinping, an independent Taiwan dispels the myth that democracy is incompatible with Chinese culture, and he wants it gone. After Russia’s invasion of Ukraine, Xi Jinping’s consolidation of power at the 20th National Congress and Taiwan’s increasing dominance in semiconductor fabrication, Taiwan has never been more vulnerable and critical to international order.
As part of his mission to counter China’s potential invasion, Under Secretary of State Keith Krach designed a 6-pronged strategy to deter Beijing’s aggression by creating an economic “security blanket” around Taiwan based on the Trust Doctrine’s network of partners.
The chess moves included rallying nations that recognize Taiwan, bringing Taiwan into the Clean Network Alliance of Democracies, brokering the largest onshoring in US history with semiconductor giant TSMC, showing visible support as the most senior U.S. diplomat to visit Taiwan in 41 years, devising the Lee Economic Prosperity Partnership—a five-year economic collaboration agreement, followed by the Science and Technology Cooperation Pact, and paving the way for a Trade Agreement.
The free trade agreement creates a halo effect for U.S. private sector investment in Taiwan which clears the way for US allies to invest. Strategically, that dramatically increases the odds of allied military support if a conflict breaks out and would cause China to think twice about an invasion.
His use of the Trust Doctrine as the fulcrum to shield Taiwan from China’s aggression by strengthening its economic ties with the US and allies earned Krach a 2022 Nobel Peace Prize nomination. Taiwan’s de facto US ambassador Hsiao Bi-khim also dubbed Krach “Taiwan’s Number One Friend.”
Taiwan’s President Tsai summed up his historic trip by saying, “Under Secretary Keith Krach’s visit exemplified the remarkable possibilities of Taiwan-US relations.”
How the Clean Network Alliance of Democracies Changed the Future of Sino-Amer...Keith Krach
How the Clean Network Alliance of Democracies
Changed the Future of Sino-American Competition
In early 2020, all previous US efforts to defeat China’s masterplan to control global 5G communications had failed. Their momentum seemed unstoppable, and their masterplan seemed inevitable. Both sides of the aisle were hitting the panic button.
Under Secretary of State Krach and his team took on a last-ditch effort and embarked on a global campaign to build the Clean Network Alliance of Democracies comprising like-minded countries, companies and civil society that operate by a set of democratic trust principles based on the “Trust Doctrine.” The objective was not only to defeat China’s telecom providers but to use the urgency of the 5G mission as a beachhead to create an enduring model for all areas of techno-economic competition with China.
In less than a year, the Clean Network included 60 countries, representing two-thirds of the world's GDP, over 200 telcos and a host of industry-leading companies. In the process, they invented a new transformational model of diplomacy now known as Tech Statecraft which integrates Silicon Valley strategies with traditional foreign policy tools. Perhaps most importantly, this nonpartisan model provided the unity and continuity of policy between Republican and Democratic Administrations, which is so vital to our allies. Bloomberg observed that this groundbreaking approach “is to China what George Kennan’s historic ‘long telegram’ of 1946 was to the Soviet Union.”
“The Clean Network’s defeat of the Chinese Communist Party’s masterplan to control 5G communications was the first time a U.S. government-lead initiative proved that China’s economic warfare is beatable because it exposed their biggest weakness: nobody trusts them,” said former US National Security Advisor General H.R. McMaster. “I don’t think anybody has done more to integrate economic security and national security than Keith Krach.”
Reference: Harvard Business School Case Study; The Clean Network and the Future Of Global Technology Competition
About TRUSTED TECH FINANCE INITIATIVE Dedicated to Advancing Freedom and Oppo...Keith Krach
TRUSTED TECH FINANCE INITIATIVE
Dedicated to Advancing Freedom and Opportunity for Microentrepreneurs
by Closing the Digital Divide in Low-income Countries
The Trusted Tech Microfinance Partnership (TechFinance) is devoted to transforming the lives of microentrepreneurs by empowering them to participate in the digital economy, with innovative paths to earn income, gain confidence in trusted technology, and improve the quality of life for their families and communities.
The Trusted TechFinance (TTF) initiative will enable participants to access trusted technology products, online education, and training to make existing businesses more scalable and efficient and pursue a broad array of technology-enabled careers including programming, e-commerce, web design, customer service . The partnership leverages the strengths of Opportunity International (OI), as the global leader in issuing microloans to lift people out of poverty, and the Krach Institute for Tech Diplomacy at Purdue (KITD), as the leading global authority for advancing freedom through trusted technology.
The transformative power of trust is a key theme of the partnership. Opportunity International transforms lives through the power of its Trust banks and trust groups.
The Trusted Tech Microfinance Partnership (TechFinance) opens a new dimension of Opportunity International microfinancing in low-income countries, expanding beyond its education finance (EduFinance) and agriculture finance (AgFinance) microfinance initiatives. The partnership extends the Krach Institute’s global tech diplomacy mission to low-income countries, defending against technological authoritarianism and advancing freedom through the adoption of trusted technology.
The Trusted Tech Microfinance Partnership Solution
A need of this magnitude and complexity requires a multi-faceted solution on a massive scale. To have a profound impact on closing the digital divide, the strategy is designed to integrate all 4 critical success factors:
Noble Mission:
• Lift the poor out of poverty
• Economic empowerment of women
• Close the digital divide
• Adoption of trusted technology to defend against authoritarianism
• Advance freedom
Proven Scalable Model
• 50 years of history with $2.5 Billion in loans
• Sustainable business model with 98% payback rate
• Reach exceeding 250 million families, 94% women
• 38,000 on the ground partners in low-income communities
Whole Solution
• Low cost prepackaged integrated technology stack
• Global on-line training capability with the first public global on-line university
• Established in country banking capabilities with 25 financial service firms
• Proven methodology of Innovation with two existing programs
Critical Partners: Experience with; support from; and training programs for;
• Leading technology companies (Microsoft, DocuSign, Meta, Cisco, Google)
• US State Department and Commerce Department
• U.S. Development Finance Corporation (DFC), USAID, and development banks
TRUSTED TECH FINANCE INITIATIVE Dedicated to Advancing Freedom and Opportuni...Keith Krach
TRUSTED TECH FINANCE INITIATIVE
Dedicated to Advancing Freedom and Opportunity for Microentrepreneurs
by Closing the Digital Divide in Low-income Countries
The Trusted Tech Microfinance Partnership (TechFinance) is devoted to transforming the lives of microentrepreneurs by empowering them to participate in the digital economy, with innovative paths to earn income, gain confidence in trusted technology, and improve the quality of life for their families and communities.
The Trusted TechFinance (TTF) initiative will enable participants to access trusted technology products, online education, and training to make existing businesses more scalable and efficient and pursue a broad array of technology-enabled careers including programming, e-commerce, web design, customer service . The partnership leverages the strengths of Opportunity International (OI), as the global leader in issuing microloans to lift people out of poverty, and the Krach Institute for Tech Diplomacy at Purdue (KITD), as the leading global authority for advancing freedom through trusted technology.
The transformative power of trust is a key theme of the partnership. Opportunity International transforms lives through the power of its Trust banks and trust groups.
The Trusted Tech Microfinance Partnership (TechFinance) opens a new dimension of Opportunity International microfinancing in low-income countries, expanding beyond its education finance (EduFinance) and agriculture finance (AgFinance) microfinance initiatives. The partnership extends the Krach Institute’s global tech diplomacy mission to low-income countries, defending against technological authoritarianism and advancing freedom through the adoption of trusted technology.
The Trusted Tech Microfinance Partnership Solution
A need of this magnitude and complexity requires a multi-faceted solution on a massive scale. To have a profound impact on closing the digital divide, the strategy is designed to integrate all 4 critical success factors:
Noble Mission:
• Lift the poor out of poverty
• Economic empowerment of women
• Close the digital divide
• Adoption of trusted technology to defend against authoritarianism
• Advance freedom
Proven Scalable Model
• 50 years of history with $2.5 Billion in loans
• Sustainable business model with 98% payback rate
• Reach exceeding 250 million families, 94% women
• 38,000 on the ground partners in low-income communities
Whole Solution
• Low cost prepackaged integrated technology stack
• Global on-line training capability with the first public global on-line university
• Established in country banking capabilities with 25 financial service firms
• Proven methodology of Innovation with two existing programs
Critical Partners: Experience with; support from; and training programs for;
• Leading technology companies (Microsoft, DocuSign, Meta, Cisco, Google)
• US State Department and Commerce Department
• U.S. Development Finance Corporation (DFC), USAID, and development banks
Prosperity Partnerships for Global Trust Network .pptxKeith Krach
U.S Ambassadors Annual Meeting
Develop and operationalize a proactive Global Economic Security Strategy that combats economic aggression, maximizes national security, and advances prosperity and peace.
Building Prosperity Partnerships for the Global Trust Network
Prosperity Partner Toolkit
Innovation Package
Software Development Labs
B2B eCommerce
Computers and Hardware
Fin-tech security
Promoting Innovation Sector
Basic software
E-commerce
Trusted tech enabling
Business support and IT services
Financing
EXIM
DFC
MCC
USAID
Regional Development Banks
Empowerment for Women
Wharton Business School Case study; Here Comes the Sun: ESG and Dirty Solar ...Keith Krach
Wharton Business School Case study; Here Comes the Sun: ESG and Dirty Solar Supply
Chains, Kelly Currie & Keith Krach
There has been explosive growth in environmental, social and governance (ESG) investment. There is also a growing consciousness that unfettered investment in China’s economy has serious consequences for America’s economic and national security. It is increasingly clear that ESG investment in Chinese entities are in serious conflict, and nowhere is this conflict more evident than the supply chain for solar panels. Investors, consumers, and voters rightly want “clean” supply chains with clean labor practices for clean energy, but the ESG investment industry has failed to deliver them. Instead, as ESG investment has increased, the supply chain for solar panels has become deeply entangled in the ongoing genocide against the Uyghurs .
Clean Capital Markets Playbook
To address this massive issue, Krach and his team determined that the Clean Capital Markets Strategy necessitated a multi-faceted campaign involving Wall Street, major corporations, civil society, American universities, and consumers. When it came to ESG, this strategy presented one of the most comprehensive models for addressing the inconsistent application of ESG standards—not just on solar, but every industry under the sun. Clean Capital Markets Strategy consisted of four prongs: (1) calling out the CCP’s egregious behavior; (2) unveiling China’s financial ruses; (3) championing investors; (4) taking action.
“Clean Capital Markets”
Rather than replicating the convoluted EU regulatory approach that likely will serve as a brake on innovation and investment, U.S. policymakers should look to the Clean Capital Markets approach. Instead of controversial and complicated new disclosure schemes, policymakers should focus on targeted, achievable goals. As part of his broad push to protect the average American investor from unknowingly financing the CCP’s malign intentions, Krach developed the multi-pronged Clean Capital Markets Playbook to address the distortions that have arisen under the current system. The playbook’s targeted, common-sense recommendations may also have the added benefit of leveling the playing field for companies that play by the rules, do not benefit from slave labor or have the backing of a predatory party-state .
In April 2022, as the co-chair of the Global Tech Security Commission, Krach pens an article in Fortune “Present your China contingency plan at the next board meeting.”
Boards increasingly understand doing business with, in, or for China represents tremendous risk. The world saw the Ukrainian attack coming. The free world has come to learn that, just like Putin, General Secretary Xi is not to be trusted.
You can’t afford to get caught off guard on this one. So, prepare now. When that moment comes, and you’re not ready, it will already be too late. When the dreaded becomes inevitable, you need to develop a plan and execute on it.
Setting Traps with Strategic Positioning: Keith KrachKeith Krach
How to Set Traps with Strategic Positioning
Strategic Positioning = Trust
Krach observed that typically what the government calls marketing is really tactical communications focused on crisis management and public diplomacy. Private-sector marketing know-how was another unique skillset the Clean Team to build the Clean Network into a global brand and develop the marketing campaign. From a strategic standpoint, Krach believed that to enable transformational change you need three things: a noble cause, an adversary, and a plan. To inspire America’s allies and partners, the noble cause became the battle of “Freedom versus Authoritarianism,” which provided a clear differentiation from the adversary—the CCP.
The Strategic Positioning—Who Do You Trust?
The Clean Team purposefully targeted the CCP, not Huawei, because they envisioned 5G as the initial beachhead in a much bigger battle. The heart of the marketing plan consisted of the strategic positioning and three simple key messages re-enforced countless times. As Krach said during his June 25 press conference and repeated continuously, “The question that governments and businesses around the globe are asking about 5G is, ‘Who do you trust?’”
Utilizing Industry Tech Trust Standards for Strategic Advantage Krach Instit...Keith Krach
In Silicon Valley, we facilitate industry standards. You set the rules of the ballgame. In DocuSign we came up with a thing called the xDTM standard, which measures the level of trust in a digital transaction. And we did the same thing with a clean network trust standard and with that enabled countries and companies to do. It set that bar of trust. Without using China's name or will always name and set that bar, it was based on those democratic principles. if you think about it, if I'm competing against you and you could steal my intellectual property, you can use slave labor, you could use coal fired power plants, you don't have to be transparent. You're going to win every tack. They would do that for their strategic advantage. What we did in one jujitsu move, we flipped them on their back and use these trust principles, these democratic values to our advantage. if you think about it. We weaponized the very. Transparency of democratic values that protect our freedom.
Clean Capital Market Campaign Chinese Stocks on U.S. Stock Exchanges- Keith K...Keith Krach
Protecting American Investors
Keith Krach Under Secretary of State
Senior Advisor Ed KinseyDeception is not compatible with transparency. With China’s entry into the American stock markets, they have subversively challenged the roots of financial transparency, a strength of the American free-market system. The Securities and Exchange Commission (SEC) issued rulings in the 1990s which seemed appropriate for that time but did not anticipate the entry of a new form of a corporation, Chinese state-owned enterprises (SOE’s) in which the government, the regulators and the beneficiaries are all one entity. As a result, SOE’s can sell securities on the New York and NASDAQ stock exchanges without complying with the disclosure rules that American and other countries’ enterprises are required to follow. Adding full control of SOE structures to deception destroys transparency.
At the time of the original rulings, the SEC stated they found no evidence of the incompatibility of laws but noted that they need to monitor the result. This was at the infancy of the emergence of foreign regulated corporations onto the American exchanges. It’s time for the SEC to revisit its 1990’s rulings to address the current laws and circumstances.
The road to security regulation internationalization was based on the principle that all sellers played by the same rules. The continuing emergence of Chinese SOEs on the American based New York and NASDAQ exchanges is stacking the deck against American companies and intensifying the risks that investors are taking. The knowledge of China’s security standards and methods to offshore valuable American capital is wildly confusing. Even seasoned Wall Street investors and investment firms are not aware of the regulatory and motive differences.
This is a perfect storm for a catastrophic meltdown due to the collection of broad risk factors that now exist.The U.S. stock markets are the largest and most respected in the world because of the quality of the regulatory governance and transparency that surrounds them. It is our responsibility to uphold those strengths and our obligation to ensure that these markets remain strong for the future generations of Americans.
Uniquely challenging times call for strong action;
The SEC must reverse course and immediately issue new rules requiring any company that does not comply with Sarbanes-Oxley and US securities laws to be delisted from the U.S. stock exchanges within the shorter of 12 months or their next annual reporting time.
The DOL must issue a risk advisory to pension plan fiduciaries regarding the additional risks related to foreign stocks that are not compliant with U.S securities laws.
The DOJ should pursue action against PERS plan fiduciaries who have conflicts of interest with the government of China. Such actions will send a signal to warn others.
Russian anarchist and anti-war movement in the third year of full-scale warAntti Rautiainen
Anarchist group ANA Regensburg hosted my online-presentation on 16th of May 2024, in which I discussed tactics of anti-war activism in Russia, and reasons why the anti-war movement has not been able to make an impact to change the course of events yet. Cases of anarchists repressed for anti-war activities are presented, as well as strategies of support for political prisoners, and modest successes in supporting their struggles.
Thumbnail picture is by MediaZona, you may read their report on anti-war arson attacks in Russia here: https://en.zona.media/article/2022/10/13/burn-map
Links:
Autonomous Action
http://Avtonom.org
Anarchist Black Cross Moscow
http://Avtonom.org/abc
Solidarity Zone
https://t.me/solidarity_zone
Memorial
https://memopzk.org/, https://t.me/pzk_memorial
OVD-Info
https://en.ovdinfo.org/antiwar-ovd-info-guide
RosUznik
https://rosuznik.org/
Uznik Online
http://uznikonline.tilda.ws/
Russian Reader
https://therussianreader.com/
ABC Irkutsk
https://abc38.noblogs.org/
Send mail to prisoners from abroad:
http://Prisonmail.online
YouTube: https://youtu.be/c5nSOdU48O8
Spotify: https://podcasters.spotify.com/pod/show/libertarianlifecoach/episodes/Russian-anarchist-and-anti-war-movement-in-the-third-year-of-full-scale-war-e2k8ai4
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
ZGB - The Role of Generative AI in Government transformation.pdfSaeed Al Dhaheri
This keynote was presented during the the 7th edition of the UAE Hackathon 2024. It highlights the role of AI and Generative AI in addressing government transformation to achieve zero government bureaucracy
Presentation by Jared Jageler, David Adler, Noelia Duchovny, and Evan Herrnstadt, analysts in CBO’s Microeconomic Studies and Health Analysis Divisions, at the Association of Environmental and Resource Economists Summer Conference.
This session provides a comprehensive overview of the latest updates to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly known as the Uniform Guidance) outlined in the 2 CFR 200.
With a focus on the 2024 revisions issued by the Office of Management and Budget (OMB), participants will gain insight into the key changes affecting federal grant recipients. The session will delve into critical regulatory updates, providing attendees with the knowledge and tools necessary to navigate and comply with the evolving landscape of federal grant management.
Learning Objectives:
- Understand the rationale behind the 2024 updates to the Uniform Guidance outlined in 2 CFR 200, and their implications for federal grant recipients.
- Identify the key changes and revisions introduced by the Office of Management and Budget (OMB) in the 2024 edition of 2 CFR 200.
- Gain proficiency in applying the updated regulations to ensure compliance with federal grant requirements and avoid potential audit findings.
- Develop strategies for effectively implementing the new guidelines within the grant management processes of their respective organizations, fostering efficiency and accountability in federal grant administration.
Many ways to support street children.pptxSERUDS INDIA
By raising awareness, providing support, advocating for change, and offering assistance to children in need, individuals can play a crucial role in improving the lives of street children and helping them realize their full potential
Donate Us
https://serudsindia.org/how-individuals-can-support-street-children-in-india/
#donatefororphan, #donateforhomelesschildren, #childeducation, #ngochildeducation, #donateforeducation, #donationforchildeducation, #sponsorforpoorchild, #sponsororphanage #sponsororphanchild, #donation, #education, #charity, #educationforchild, #seruds, #kurnool, #joyhome
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
2024: The FAR - Federal Acquisition Regulations, Part 37
Digital Dollar Strategy Paper Krach Touw (Public Version)
1. Public Version
(SBU) SENSITIVE BUT UNCLASSIFIED 1
SEPTEMBER 2020
The Rise of China Payment
Networks and Digital Currencies
BLUF: (SBU) China’s emerging payment networks, together with its new
digital currency, pose a greater long-term threat to U.S. national
security interests globally than 5G, AI, or semiconductors,
combined. If the United States acts now, it can counter China’s
expansionary efforts to control emerging market money flows,
and ultimately, global monetary flows. Policy and strategy
recommendations are provided.
FROM
Paul C. M. Touw, Science Fellow and Chief Strategy Officer
CONTRIBUTORS AND SUPPORTING AUTHORS
Mung Chang, Science and Technology Adviser to the Secretary
Edward P. Kinsey, II, Senior Advisor, Chief Financial Strategy Officer
James Shinn, Senior Advisor, Economic Growth, Energy and the Environment
U.S. Department of State
Under Secretary Keith Krach
Office of Economic Growth, Energy, and the Environment
2. Public Version
(SBU) SENSITIVE BUT UNCLASSIFIED 2
Executive Summary
(SBU) Over the next decade, digital forms of money will transform global economies.
More of the necessary goods and services consumers require are only available online,
from Amazon to airline tickets, to ridesharing, and food delivery. Smartphones are now
more ubiquitous than bank accounts or consumers with credit (to obtain credit cards) in
developing economies and in the United States. Digital forms of money and the eventual
extinction of paper currency are inevitable.
(SBU) A decade ago, a similar transformation in telecom networks was also unfolding.
Before 2009, China’s Huawei and ZTE telecom equipment providers were mostly
confined to China. Huawei won its first international telecom deployment outside of
China in 2009. China’s CCP would then fuel Huawei’s global rise in advanced 5G
networks to become the world’s top telecom vendor with US$75 billion in tax breaks,
financing, and cheap resources.1 Huawei now has US$122 billion in revenues, more than
twice the revenues of Cisco Systems, and operations in nearly 170 countries.2
(SBU) Today, a potentially more serious technology race is unfolding with significant
implications to U.S. national security interest globally: the race to control advanced
payment networks and digital currencies. Moving data (often encrypted) over China-
controlled 5G digital networks is one set of security concerns. Moving money of entire
economies over China-controlled digital payment networks, where personal information
(name, locations, bank accounts, SSN, address, phone number, usernames and
passwords) is required to be stored within these networks, is quite another. Alipay and
TenPay make TikTok look like child’s play. To underestimate China's global rise in
digital currencies and payment networks today, is synonymous to ignoring Huawei’s
improbable rise in 2010.
(SBU) China’s Ant Group (“Alipay”) and Tencent Holdings Ltd. (“TenPay,” also known
as “WeChat Pay”) payment networks, have already surpassed the global transaction
volumes of Visa, Mastercard, and American Express (combined)—in just five years.3 In
under a decade, these Chinese payment platforms now transact over US$41 trillion per
year, dwarfing comparable U.S. fintech payment platforms such as PayPal (at mere
US$712 billion). In addition, the fee taken from merchants for these Chinese payment
networks is very low compared to fees set by international banks from western payment
1
Wall Street journal, December 25, 2019, “State Support Helped Fuel Huawei’s Global Rise,”
https://www.wsj.com/articles/state-support-helped-fuel-huaweis-global-rise-11577280736
2
Huawei, 2019, https://en.wikipedia.org/wiki/Huawei
3
Transaction volumes and comparisons discussed in more detailed later in this report.
3. Public Version
(SBU) SENSITIVE BUT UNCLASSIFIED 3
networks, for credit or debit cards. Transaction fees to merchants for Alipay and TenPay
are 0.55% to 0.60%, versus 1.5% to 3.5% for comparable payment networks from Visa,
Mastercard, American Express, PayPal, Venmo, Apple Pay, or Google Pay.4 It is
important to note the U.S. economy spends twice as much on payment fees ($470
billion) than it does on all wireless telecom services ($190 billion).5 Like lower cost 5G
from Huawei, lower payment fees are an enormous inducement for a country or
economy to switch to lower cost Chinese payment networks. Chinese digital payment
networks are also cheaper than the cost to manage physical cash (typically 1%). Antpay
and TenPay are not only cheaper than any other form of payment; they are faster
(instant), more secure, and more convenient to use.
(SBU) Ant Group is executing the world’s largest IPO in 2020, expected to exceed Saudi
Aramco’s record breaking IPO in 2019, raising an expected US$35 billion war chest.6
Ant Group and Tencent will aggressively expand their fintech and payment networks in
Africa, Latin America, and the Indo-Pacific region, currently comprising 62% of the
world’s population.7 Ant Group, for example, has already made investments or acquired
fourteen (14) fintech companies in thirteen (13) countries8 outside of China including
major investments in India’s Paytm.
(SBU) In 2020, China also launched the world’s first Central Bank Digital Currency
(CBDC) based on the renminbi (a “digital yuan”). China began research on its digital
yuan in 2014.9 Although this effort is targeted at the M010 money supply, given its digital
nature, it can eventually grow into M111 money supplies. Both Alipay and TenPay will
support China’s digital yuan, making the renminbi the primary currency underpinning
these Chinese-controlled payment networks.12 A digital yuan by itself would likely be
4
MindStudios, 2018, “China Payment Systems Guide: Alipay vs WeChat Pay vs UnionPay,”
https://themindstudios.com/blog/china-payment-systems-guide/
5
According to McKinsey & Company, the U.S. economy spends $470 billion per year on payment fees, statista
estimates that the entire service revenues of the wireless industry are less than $200 billion.
6
Bloomberg, September 20, 2020, “Jack Ma’s Ant to Lift IPO Funding Target to $35 Billion,”
https://www.bloomberg.com/news/articles/2020-09-21/jack-ma-s-ant-is-said-to-lift-ipo-funding-target-to-35-
billion
7
World Bank population estimates, 2019.
8
Pitchbook media mentions, Rabbit Capital
9
Ledger Insights, 2019, “China is ready for central bank digital currency issuance. Here’s the plan,”
https://www.ledgerinsights.com/china-ready-central-bank-digital-currency-cbdc/
10
M0 money refers to the most liquid form of money, or cash.
11
M1 money supply includes m0 plus, bank deposits, checks, traveler’s checks, and other checkable deposits.
12
Forbes, May 24, 2020, “China’s Central Bank Digital Currency Will Strengthen Alipay and WeChat Pay, Not
Replace Them,” https://www.forbes.com/sites/zennonkapron/2020/05/24/chinas-central-bank-digital-currency-
will-strengthen-alipay-and-wechat-pay-not-replace-them/#5709d0f56b69
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confined to China, but together on growing payment networks outside of China, is a far
greater threat to the U.S. dollar as the reserve currency.
(SBU) Thus far, the United States does not have a strategy or policies to counter China’s
advances in payment networks and expansion in Africa, Latin America, or the Indo-
Pacific. America can and must act now while it retains a global competitive advantage in
reserve currencies, supporting technologies, and international monetary flows.
(SBU) Foreign central banks have a unique and foremost interest in controlling their
currencies and payment networks within their economies. They also control the laws,
licensing, and monetary policies regarding payments and money in their countries.
However, they lack access to technology solutions to deploy digital currencies, payment
networks, consumer e-wallets, or merchant point-of-sale (POS) systems—where U.S.
technology companies lead, including the world’s top cloud computing platforms,
sophisticated transactional databases, the world’s largest social media platforms, and 99
percent13 of the worldwide smartphone OS market.14
(SBU) Initial U.S. policy and strategy recommendations:
1) Consider placing Tencent (TenPay and WeChat Pay) and Ant Group (Alipay) on
the Entities List, requiring a license for any current or future U.S. technologies,
particularly before Ant Group’s impending IPO,
2) Block downloads of Alipay and WeChat Pay in the United States (after careful
interagency deliberations). The highly personal information that is required to be
stored in Alipay and TenPay (WeChat Pay), makes TikTok look like child’s play,
3) The United States should lead a consortium of technology partners to fast track
the development of a better, more compelling alternative digital currency and
payment network platform for developing economy central banks.
(SBU) We believe the right set of U.S. technology partners15 would be highly motivated
to participate in a consortium effort to provide these technologies and a central bank
digital currency platform to foreign central banks—and are extremely well positioned to
do so—if greenlighted by the United States Government. An open architecture,
13
Of the worldwide smartphone operating systems (OS) market in July 2020, Google Android makes up 74.6% and
Apple iOS makes up 24.82%, per the footnote below.
14
Statista, May 2020, “Mobile operating systems’ market share worldwide from January 2012 to July 2020,”
https://www.statista.com/statistics/272698/global-market-share-held-by-mobile-operating-systems-since-2009/
15
Technology partners that may include Apple (Apple Pay and iOS), Google (Google Pay and Android), Facebook (to
include Libra), Microsoft, Amazon, and IBM (as Cloud providers) and other potential technology partners to be
determined.
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configurable, central bank digital currency platform for foreign central banks, with
international currency clearing mechanisms, universal and international point-of-sale
(POS) standards, and integrations into mobile e-wallets is proposed.
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Section 1:
In 5G, AI, and Chips, the U.S. and its Allies are Leading
Despite the hysteria, the United States and its western allies are leading in
the 5G, AI, and semiconductor races versus China, in part due to the high
awareness guiding U.S. and western policy in these sectors
The growth of China's 5G telecom giants ZTE and Huawei caught the United States by
surprise. Huawei first entered the international 3G and 4G market in 2009 and, within a
decade, would become the world's largest telecom provider, with US$122 billion in
revenues and operations in nearly 170 countries.16 With China’s national intelligence
civil-military fusion laws, in 2018, U.S. policy officials began highlighting the risks that
ZTE and Huawei’s next-generation 5G networks posed to data flows, and their potential
use by the Chinese government for espionage.
In 2019, the U.S. began successfully implemented countermeasures and sanctions to
stem Huawei 4G and 5G deployments in the United States and with allies. By mid-2020,
the list of countries considering bans or banning Huawei or ZTE outright include the
United States, Japan, the UK, India, Australia, New Zealand, Canada, Germany, France,
and Sweden, along with other major telecom operators. In August 2020, the United
States enacted new sanctions cutting off Huawei’s access to vital, advanced computer
chips. Thus, although more work remains, risks associated with ZTE and Huawei have
been significantly mitigated, particular of espionage in the United States, which has
been effectively blocked.
16
Huawei, 2019, https://en.wikipedia.org/wiki/Huawei
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Which countries have banned Huawei?
Is China losing in 5G? In 2019/20, Europe beat China by a nearly 2-1 margin
in 5G equipment wins17
17
5G LightReading, Feb. 24, 2020, “Ericsson, Huawei & Nokia’s 5G ‘wins” are no big deal,”
https://www.lightreading.com/5g/ericsson-huawei-and-nokias-5g-wins-are-no-big-deal/a/d-id/757677
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Artificial Intelligence (AI) and semiconductors pose other cyber-security, competitive,
and commercial risks. However, although China and the U.S. are both heavily investing
in AI research and development (R&D), the U.S. still holds a lead in the
commercialization of AI.18 The United States is also responding to the AI challenge by
investing heavily in AI and currently at a great rate than China. AI investments are
nearly doubling in the U.S. each year and hit US$16.5 billion in 2019.19
Furthermore, new estimates from the Center for Security and Emerging Technology
(CSET) show that the U.S. may be outspending China in AI R&D overall, and “favor the
United States.” CSET further estimates that, “we assess with low to moderate confidence
that China’s public investment in AI R&D was on the order of a few billion dollars in
2018. With higher confidence, we assess that China’s government is not investing tens of
billions of dollars annually in AI R&D, as some have suggested.”20 Other sources suggest
North America is estimated to be investing 55% of the world’s AI R&D spend, versus the
rest-of-world (including China and Europe) at 45% (see chart below).
Global venture capital investments in AI21
• North America leading the way at 55% market share
18
Kai-Fu Lee, 2018, “AI Super-Powers, China, Silicon Valley, and the New World Order”
19
Artificial intelligence (AI) funding investment in the United States from 2011 to 2019, 2020, statista,
https://www.statista.com/statistics/672712/ai-funding-united-states/
20
Center for Security and Emerging Technology (CSET), December 2019, “Chinese Public AI R&D Spending:
Provisional Findings”
21
Pitchbook, 2019, stateof.ai
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Western allies also hold a lead over China in semiconductor design, development, and
advanced node fabrication, where China is still a majority consumer of foreign and U.S.
semiconductors.22 Chinese foundries lack leading-edge technologies because of long-
standing export controls dating back to 199623 due to the Wassenaar Arrangement
involving 42 participating states, which excluded China.24 China’s best foundries make
chips at 14 nanometers while the leading edge is 7 nanometers. Chinese manufacturers
are therefore two generations behind the industries top performers. As a result, China
imports the vast majority of its semiconductors.
China’s semiconductor sales versus purchases25
• China is a net consumer of chips, by a large margin
Thus, America’s countermeasures to China’s 5G initiatives, and its lead in AI and
semiconductors has helped to significantly mitigate the risk and threats to U.S. national
security from these sectors. In fact, European 5G telecom equipment manufacturers
22
McKinsey&Company, 2018, “McKinsey on Semiconductors,”
https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/semiconductors/pdfs/mosc_1_revised.ash
x
23
McKinsey & Company, “McKinsey on Semiconductors,”
https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/semiconductors/pdfs/mosc_1_revised.ash
x
24
Wikipedia, 2020, “Wassenaar Arrangement,” https://en.wikipedia.org/wiki/Wassenaar_Arrangement
25
ATLAS, Data: Stanford C. Bernstein
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beat China in 5G wins by nearly a 2-1 margin in 2019-20. That is not to suggest these
risks have been completely mitigated, or that there is not more that the United States
must do—but the U.S. has active policy and strategy initiatives in place for 5G, AI, and
semiconductors—and, in most cases, the United States and western allies have the edge
or are winning in 5G, AI, and semiconductors.
FOR OFFICIAL USE ONLY, PRE-DECISIONAL, DELIBERATIVE 17
Select U.S. actions to counter China
5G, Semiconductors, AI
5G Semiconductors AI Payment Networks
• Banned Huawei, ZTE in
the United States
• Sanctioned Huawei,
ZTE
• Export controls on
semiconductor
equipment and
technology to Huawei
• International effort to
block Huawei in foreign
countries, Japan,
Australia, part of
Europe
• 1996 Wassenaar
Arrangement, excluding
China
• 2020 Chips Act, $10
Billion, passed by
Congress, signed by
President
• Numerous Export
Controls on
semiconductor
equipment to China
• DoD, NSF invest
billions in AI
• Republicans propose
$100 billion Endless
Frontier Act, including
investments in AI
• Democrats propose
$350 billion bill to
counter China,
including investments
in AI
?
• EO blocking
downloads, halted by
courts
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Section 2:
In Payment Networks, China is The Tiger,
and the Threat is Greater
The Golden Rule: “He who controls the gold, rules.”
China’s payment networks are bigger, better, and spreading faster, while
China leads in a digital currency, with almost no response from U.S.
policy makers—the combination poses a great threat to U.S. national
security interest at home and abroad. Here’s why.
The advancement of Chinese digital payment networks and the introduction of the
world's first Central Bank Digital Currency (CBDC) based on the renminbi (“digital
yuan”) pose an entirely new set of risks and threats over the coming decade. These
emerging risks remain largely unchallenged by a western response or western
alternatives. As a result, at present, China’s emerging digital currency and payment
networks pose a greater long-term threat than 5G, AI, or semiconductors, combined; in
large part, due to the lack of a response or the awareness of the risks and threats posed
to U.S. national security interesting by these emerging Chinese fintech networks.
Payment networks from Chinese Alipay and TenPay are faster, more efficient, and
increasingly more ubiquitous in China and South-East Asia—and poised for explosive
growth in developing economies where there are fewer electronic payment alternatives.
By comparison, U.S. payment networks such as Visa, Mastercard, American Express,
and PayPal have been blocked from the Chinese markets until 2019, and only given
licenses to operate in China (though a joint-venture investment) after Alipay and
TenPay dominated the Chinese payments markets.
Chinese fintech firm Ant Group (which owns Alipay) is expected to raise $35 billion in
the world’s largest IPO this year, exceeding Saudi Aramco’s IPO in 2019. Ant Group is
expected to aggressively expand its payment platform footprint from its current foothold
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in China, to North America,26 Latin America, Europe, the U.S., Africa, and South-East
Asia. Ant Group has already made investments or acquired fourteen (14) Fintech
companies in thirteen (13) countries27 including major investments in India’s Paytm.
With Ant Group’s expected new war chest of $35 billion from its 2020 IPO, Ant Group is
planning significant expansions of its fintech micro-loan and payment networks in
Africa, Latin America, India, and South-East Asia. Both Ant Group’s Alipay and
Tencent’s TenPay payment networks are expected to become a conduit for China's
CBDC digital yuan, its Belt and Road Initiatives, and ultimately attempt to challenge
U.S. dollar hegemony as the world’s reserve currency, particularly in the developing
world.
China and the developing economies targeted by Chinese payment networks are
currently 62% of the world’s population28 and expected to be 40% of global GDP by
2030, as compared to 15% contributed by the United States.29 Should China gain a
foothold in digital payment networks and its CBDC digital yuan, it will control global
payments and the flow of money through Chinese servers that are nearly three times the
size of the United States economy, and more than ten times the size of its population.
Espionage and securing data flows over 5G networks are one set of security risks.
Potentially controlling developing economies through the flow and hegemony of money
is quite another. To underestimate China's emerging rise in digital currencies ignores
the history of Huawei's improbable rise in 5G telecom networks. However, China's
digital payment networks and digital yuan are still primarily confined to the Chinese
economy. The time for the United States to act with new digital currency technologies is
now, while the U.S. is still the dominate world reserve currency and retains a lead in
26
PYMNTS.com, February 18, 2019, “Why North American Merchants Are Adopting Alipay In-Store (And Online),”
https://www.pymnts.com/news/retail/2019/alipay-in-store-online-digital-mobile-payments/
27
Pitchbook media mentions, Rabbit Capital
28
World Bank population estimates, 2019.
29
Martin Jacques, “When China Rules the World, the End of the Western World and the Rise of a New Global
Order”
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other enabling technologies such as smartphone operating systems (or “e-wallets”
devices).
Market Share of Mobile vs Non-Mobile Payments in China
Second Title
This report will explore how the State Department and United States Government can
work with a consortium of technology partners to provide a better, more compelling set
of alternative digital currency solutions for developing economy central banks to adopt
their own digital currencies and payments platforms. The U.S. still retains enormous
advantages as the world’s reserve currency and with the dominate smart phone
operating systems and payments e-wallets (Apple Pay, Google Pay, and Facebook’s
Lybra initiatives, etc.). An open architecture, configurable, central bank digital currency
platform, with direct currency clearing mechanisms, universal point-of-sale (POS)
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Appendix
Chinese 5G, AI, and semiconductors are a threat, although increasingly
mitigated and contained by western countermeasures and alternatives
In the last two years, the United States government has placed significant focus on the
potential threat posed by China’s rise in 5G telecom networks from Huawei.
Policymakers and intelligence officials have highlighted the potential risks that the
telecommunications giant could be exploited by the Chinese government for espionage.
In 2019, the United States issued countermeasures effectively blacklisting Huawei.
Similar espionage arguments can be made for the rise in Artificial Intelligence
technologies and the use of Chinese semiconductors in transmitting or storing data.
These technologies too can be used for espionage, hacking, data piracy, or IP theft.
However, the United States does have counter measures including the use of encryption
and better cyber security. Probably the greatest risk to the United States and its allies is
that many public and private sectors entities simply do not employ cyber security more
effectively.
Furthermore, the AI race is still new, and America and its allies have stepped up their
innovation in AI and still largely lead in the development of advanced semiconductors.
The rise in Chinese digital currencies and payment platforms is a far
greater threat, and remains largely unchecked
While the United States innovation in payments over the last decade has largely
involved the addition of a security chip in plastic payment cards, the rise and innovation
in Chinese payments systems has been swift and profound. In less than a decade, over
90% of China’s consumer transactions now occur online or via mobile phones. Two
FinTech juggernauts dominate China’s mobile payments market, Alipay and WeChat
Pay (also known as “Tenpay”). Chinese digital payment platforms also now surpass
worldwide consumer transaction volumes of Visa and Mastercard. In 2020, after 6 years
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in development, China introduced the world’s first Central Bank Digital Currency
(CBDC). The United States has only began considering a CBDC in 2020.
To underestimate China’s emerging rise in digital currencies and
payments, is to ignore the history of Huawei’s improbable rise in 5G
A decade ago, in 2009, the Swedish phone giant Teliasonera set out to build one of the
world’s first 4G networks. Teliasonera made an unexpected choice: Huawei, a Chinese
company with little presence outside China.30 Since then, Huawei has become the
world’s largest telecom equipment company, with revenues of $107 billion.
Chinese innovation in currencies cannot be ignored. China invented paper currency
nearly 1,400 years ago, in 618 A.D. But more importantly, in just the last five years,
China has rendered its own paper invention nearly extinct on mainland China. And the
efficiency of China’s payment systems vastly exceeds U.S. payments systems. Alipay
payments are free under US$294, and they charge a service fee of 0.1% on payments
over 2,000 yuan. By comparison, PayPal, Visa, and Mastercard charge on average
2.98%, or nearly 30 times more. To put this in perspective, the U.S. Federal Corporate
Tax brings in US$209 billion to the Treasury. The cost of moving money to the U.S.
economy, in counting paper, moving paper, ATM fees, payment and credit card fees is
nearly [2.2x] more, at US$470 billion [add references]. The entire bill for energy to the
U.S. economy is just 2.4x more than the cost of moving money, at US$1.14 trillion. If
efficient energy is a critical competitive advantage to the U.S. economy, than surely
efficient payments are too. China has the advantage with a payments infrastructure that
is 30 times less expensive to its economy than the U.S. payments system is to its own
economy.
The United States has focused on 5G, but the control and flow of money
and commerce worldwide is a vastly greater threat
30
Foreign Policy, “The Improbable Rise of Huawei,” April 3, 2019, https://foreignpolicy.com/2019/04/03/the-
improbable-rise-of-huawei-5g-global-network-china/
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China is deploying a Central Bank Digital Currency with the eventual goal
of supporting its One Belt, One Road policy, to challenge U.S. reserve
currency hegemony
In 2020, China began testing its own Central Bank Digital Currency (CBDC). This RMB
CBDC will eventually be distributed through Alipay, Tenpay, and through Chinese and
international banks. The goal of these efforts is best summed up by China’s Zero One
Think Tank: “The fundamental purpose of CBDC is to promote the internationalization
of the RMB, especially in the “One Belt, One Road” policy environment, to improve the
convenience of RMB cross-border payment, and to enhance the RMB as a tool for
international trade pricing and payment settlement, and to enhance the status of the
RMB as a value storage and reserve currency.”31
Alipay and Tenpay are aggressively expanding abroad, China’s CBDC will
follow, in highly populated developing countries
Alipay is an online and mobile payment platform based in Pudong, Shanghai, China. Its
parent company is Ant Financial Service Group based in Hangzhou, China. Ant
Financial raised a record US$14 billion at a valuation of US$150 billion in 2018.32
WeChat Pay (also known as Tenpay) is a similar online and mobile payment platform
within WeChat, a social media company, developed by Tencent Holdings, Ltd based in
the Nanshan District, Shenzhem, China. Tencent has a market capitalization of US$622
billion.33
Alipay and WeChat Pay dwarf U.S. mobile payments, surpass Visa and
Mastercard volume worldwide
31
Ledger Insights, “How China’s Central Bank Digital Currency will help Renminbi to Challenge the Dollar,”
https://www.ledgerinsights.com/china-central-bank-digital-currency-cbdc-renminbi-dollar/
32
“Ant Fianncial raises $14 billion I world’s largest-ever single fundraising,” Reuters, June 7, 2018,
https://www.reuters.com/article/us-ant-financial-fundraising/ant-financial-raises-14-billion-in-worlds-largest-ever-
single-fundraising-idUSKCN1J407Y
33
Yahoo Finance, August 17, 2020.
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WeChat has over 1.15 billion users globally; Alipay has over 1.3 billion. Alipay and
WeChat together control over 90% of payments in China, both contributing to consumer
mobile payments in China has grown 28-fold since 2015. China’s mobile payments
transaction volume hit US$41.51 trillion in 2019, dwarfing PayPal (at US$712 billion in
payments in 2019) and U.S. mobile payments volume overall (at a mere US$64 billion
in 2018). WeChat Pay and Alipay have also surpassed worldwide payments volume of
Visa and Mastercard (at US$28.3 trillion in 2018). Mobile payments benefit from
greater ease of use, better security, the ability to buy things with only QR codes, and no
additional need to carry a wallet, cash, or a myriad of credit and debit cards.
A digital silk road expands China’s belt and road initiatives
While the U.S. primary payment innovation over the last decade has been the addition
of a chip to credit cards, China Fintech industry has flourished in more advanced digital
payments. China payments environment benefits from fewer regulatory hurdles versus a
labyrinth of U.S. State and Federal regulations that have crippled payments innovation
in the United States. These regulations include separate money-transmitter regulations
and laws in all 50 States, a process that can take up to two years and cost millions of
dollars for a new FinTech company to complete.