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Blockchain Technology and Globalization Pt. 3 – TheNews.Asia

How the industry globalizes: The deterritorialization of money and fiscal markets

Globalization has progressed far enough that scholars are now describing deterritorialization. Deterritorialization is a phenomenon that demonstrates how cultures have called a new territory home for so long that they adopt it as their own despite what the political name or geographic location would otherwise indicate. This phenomenon has been rapidly exploited by the blockchain industry. Binance is one of the largest cryptocurrency exchanges. It was founded in China by a Chinese man, but now calls the tiny Mediterranean island Malta its home. In fact due to local law, Chinese blockchain companies cannot be registered in China at all, so they must find a new home. There are Korean companies registered in Singapore, Malta, and the United States, American companies registered in South Korea, and countless other examples of blockchain companies being registered in far-flung regions of the world.

The many relocations of companies across various borders are all great examples of deterritorialization. Representing their projects, people are constantly moved across borders and literally all over the habitable world for their company. They may travel across three continents in as many months, then find a fourth continent to call their home. The Binance team alone is comprised of six people; three of them are Chinese, three are American.[1] The Chinese exchange headquarters moved to Malta early in 2018, and currently employs people in all major markets.

What we see is blockchain transcending transnationalism by deterritorializing the places it touches. These companies seem to transcend political borders, or at least ignore them, because the digital currencies that are coveted by people in the industry have no political affiliation or centralized bank to back them up. In fact, decentralization is the modus operandi of cryptocurrencies. It is no surprise that this is happening since it has been noted that capitalist enterprises like blockchain companies control space and time by relocation operations. Blockchain companies are just further demonstrating how capitalism constantly deterritorializes and reterritorializes time and place for the sake of higher profits.[2]

Practical uses of blockchain technology

More specifically, the financial markets are slowly becoming deterritorialized, but that speed may pick up as the space between blockchain companies decreases. Deterritorialization of money is anathema to what central banks stand for as the protectors or hoarders of currency and trust. What we are seeing in real-time, however, is finance being moved onto blockchains for the sake of speed and even greater trust.

Already cross-bank and cross-border loan issuances for small businesses are running on blockchain-based platforms at some major banks such as China Construction Bank and Bank of China. Others are testing out blockchain-based digital wallets to enhance the functionality of their own existing ones. As of August of this year, there were already 200 banks testing out or outright fully utilizing blockchain technology on their platforms. Some of those banks include Bank of America, Citi, Chiba Bank, Shinhan Bank, Deloitte, and HSBC.[3]

Going a step further, it may be possible that cryptocurrencies have a greater chance of deterritorializing money. Cryptocurrencies function without the need of a central bank and are free from the hindrances of government oversight. Although many governments, including G20, are trying to implement a regulatory framework, it is becoming more likely that blockchain technology will be integrated and more broadly adopted in government bureaucracies than stifled. One criticism is that criminals take advantage of the lack of regulation, but criminals will commit crimes whether they have cryptocurrencies or not. Others see the lack of government interference as them saving money on something they shouldn’t have to purchase in the first place: trust.

Political borders are irrelevant to cryptocurrencies because they exist in what might be considered the 4th dimension of existence which cannot be perceived without a device although they are all around us on a network. Even the Chinese government’s use of the Great Firewall, which is meant to log, filter, and block access to certain internet content, cannot prevent the use of cryptocurrencies. This subversion is made possible by the use of Virtual Private Networking technology (VPN). The more people who choose to accept cryptocurrencies as viable forms of payment, the less useful central banks will be. This is the ultimate challenge for the deterritorializing efforts of blockchain technology.

To be continued as part of a series. 1 2 4

[1] Sudhir Khatwani. Binance Cryptocurrency: A Unique and Rapidly Growing Crypto Exchange. (coinsutra.com, 10/13/2018)

[2] M. Kearney, The Local and the Global: The Anthropology of globalization and transnationalism. Annual Review of Anthropology, Vol. 24, (1995), pp. 553.

[3] Mappo, Comprehensive List of Banks using Blockchain Technology. (hackernoon.com, 08/20/2018)


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