3. Crypto Globalization
1. What is globalization?
The concept of globalization became widespread only after 2008, although the beginnings of globalization existed in the 1980s. At that time, there was relatively little global trade, but countries like Japan gradually became part of globalization by exporting automobiles at low prices. Over time, the combination of technology exports from developed countries and low-cost labor made globalization gradually accelerate. After China’s accession to the World Trade Organization in 2002, the rapid rise of the manufacturing sector, especially the low-cost OEM and factory model, became a key driver of globalization. after 2008, globalization entered an accelerated phase, especially as Chinese products began to be exported in large quantities to all parts of the world, marking the full acceleration of globalization.
A simple definition of globalization is that people anywhere can do business and sell their products all over the world through the Internet and modern transportation. Globalization not only accelerates the flow of goods, but also affects the purchasing power of national currencies, making currency depreciation and appreciation more pronounced in the global economic system.
2. Impacts of globalization
Globalization has first brought about a transformation of production methods in developed countries. Many developed countries have outsourced their production lines to low-cost countries, especially in Asia, such as China, Vietnam, Thailand and Mexico. This relocation of the industrial chain has not only increased the interconnectedness of the global economy, but also led to more frequent interactions between the currencies and foreign exchange reserves of different countries. Today, the US dollar still dominates the global monetary system as the main reserve currency. In addition, natural resources such as gold and oil are an important reflection of the intertwining of economic and political power in the context of globalization.
Globalization has allowed developed countries to focus on high-tech and light industrial production, while outsourcing labor-intensive, heavy industrial production to developing countries. This division of labor has enhanced the efficiency of the global economy, but it has also intensified competition and economic dependence among different countries.
3. Why are cryptocurrencies adapted to globalization?
The digital nature of cryptocurrencies makes them ideal payment tools in the era of globalization. The rapid development of the Internet has made it possible to digitize payment methods, and traditional cross-border payments are often accompanied by high fees and complicated exchange rate conversion problems. Cryptocurrencies, on the other hand, eliminate these problems and provide a more convenient and economical way to make cross-border payments. For example, by using stablecoins or other cryptocurrencies, users can avoid the exchange rate fluctuations and fees associated with the traditional banking system, thus greatly improving payment efficiency.
Whether for online shopping or cross-border transactions, using cryptocurrency payments can save time and costs, especially on a global scale, eliminating the need to search for a foreign exchange window for each transaction.
4. The “migration” of cryptocurrencies
Globalization is not just about the migration of industries and capital, but can also be used to describe the migration of cryptocurrencies. For example, the shift from traditional fiat currencies to cryptocurrencies, or the migration from one blockchain ecosystem to another. The migration between public chains, the distinction between EVM-compatible and non-EVM chains, and the rise of the Layer 2 project are all examples of the migration phenomenon that cryptocurrencies are experiencing in the process of globalization.
Such migrations not only reflect technological advances, but also show how different blockchain platforms can attract users and enhance the value of the ecosystem. If a platform cannot provide enough value to users or does not have enough application scenarios to attract users, it will be difficult for it to stand out in the competition of globalization.
5. Will cryptocurrency become a global currency?
In the future, if a stablecoin like the U.S. dollar, or other similar cryptocurrencies emerge, their potential as a global payment tool should not be underestimated. Although the use of cryptocurrencies globally is still in its early stages, their decentralized, transparent, and efficient nature makes them likely to become one of the mainstream payment methods in the future.
For example, many international businesses and service providers have already begun to accept payments in Bitcoin or stablecoins (e.g., USDT, USDC, PYUSD, etc.), and although there are not yet many users, this demonstrates that cryptocurrencies have the potential to become a mainstream tool for global payments. If this trend continues, cryptocurrencies could become a globally unified payment and stored value tool in the future.
Through the application of cryptocurrencies, especially stablecoins, the globalized payment system will become more fluid and decentralized, breaking through the limitations of the traditional monetary system and providing a wider range of application scenarios.