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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 now describe deterritorialization. Deterritorialization is a phenomenon that demonstrates how cultures have defined a new domestic territory for so long to adopt it as their own, despite what the political name or geographic location would otherwise indicate. This phenomenon was quickly exploited by the blockchain industry. Binance is one of the largest exchanges of cryptocurrencies. It was founded in China by a Chinese man, but now he calls the small Mediterranean island, Malta, his home. In fact, due to local law, Chinese blockchain companies can not be registered in China, so they have to 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 registered in remote regions of the world.

The numerous relocations of companies across the various borders are all great examples of deterritorialization. By representing their projects, people are constantly moved beyond the boundaries and literally in the whole habitable world for their company. They can travel across three continents in many months, then find a fourth continent to call their home. The Binance team alone is made up of six people; three of them are Chinese, three are American.[1] At the beginning of 2018 the Chinese foreign exchange headquarters moved to Malta and currently employs people in all major markets.

What we see is the blockchain that transcends transnationalism, deterritorializing the places it touches. These companies seem to transcend political boundaries, or at least ignore them, because the digital currencies that are sought by people in the sector have no political affiliation or centralized bank to support them. In reality, decentralization is the modus operandi of cryptocurrencies. Not surprisingly, this is happening because it has been noted that capitalist firms such as blockchain companies control space and time from relocation operations. Blockchain societies are only further demonstrating how capitalism constantly deterritorializes and reterritorializes time and place for greater profits.[2]

Practical uses of blockchain technology

More specifically, financial markets are slowly becoming deterritorialized, but this speed could increase as the space between blockchain companies decreases. The deterritorialization of money is an anathema for what central banks represent as protectors or hoarders of currency and trust. What we are seeing in real time, however, is that finance is moved to blockchain for greater speed and greater confidence.

Cross-bank and cross-border loan issues for small businesses are already underway on blockchain-based platforms at major banks such as China Construction Bank and Bank of China. Others are testing blockchain-based digital portfolios to improve the functionality of existing ones. As of August of this year, there were already 200 banks that tested or completely used blockchain technology on their platforms. Some of these banks include Bank of America, Citi, Chiba Bank, Shinhan Bank, Deloitte and HSBC.[3]

Going further, it might be possible that cryptocurrencies have more chances to deterritorialize money. Cryptocurrencies work without the need for a central bank and are exempt from obstacles to government oversight. Although many governments, including the G20, are attempting to implement a regulatory framework, blockchain technology is increasingly likely to be integrated and more widely adopted in government rather than suffocated bureaucracies. One criticism is that criminals take advantage of the lack of regulation, but criminals will commit crimes if they have cryptocurrencies or not. Others see the lack of government interference as they save money on something they should not have to buy in the first place: trust.

Political boundaries are irrelevant to cryptocurrencies because they exist in what could be considered 4th dimension of existence that can not be perceived without a device even if they are all around us on a network. Also the use of the Great Firewall by the Chinese government, which aims to record, filter and block access to certain Internet content, can not prevent the use of cryptocurrencies. This subversion is made possible by the use of Virtual Private Networking (VPN) technology. The more people choose to accept cryptocurrencies as viable forms of payment, the less useful the central banks will be. This is the ultimate challenge for the deterritorialization 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, Complete list of banks that use Blockchain technology. (hackernoon.com, 20/08/2018)

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