WEBVTT - APAC Stocks Jittery as Tariff Concerns Build Up

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Chrisner. We're

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<v Speaker 2>seeing a cautious tone in markets across the APAC this

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<v Speaker 2>morning after equity market weakness in the States. Joining US

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<v Speaker 2>now for a closer look is Olivier Dossier, head of

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<v Speaker 2>Investment decision Research for the APAC at Simcorp Olivier It's

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<v Speaker 2>always a pleasure. Would you say that the lack of

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<v Speaker 2>conviction is correlated directly with the uncertainty that we're seeing

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<v Speaker 2>around these tariffs.

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<v Speaker 3>Yeah, certainly, we haven't got many kind of details yet

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<v Speaker 3>as to the status of these talents. For especially with

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<v Speaker 3>regards to the US and China relationship. The largest and

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<v Speaker 3>second largest economies in the world are about to have

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<v Speaker 3>another trade war, and that really makes everybody else nervous

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<v Speaker 3>because you can't plan anything until you know what direction

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<v Speaker 3>this is taken, and if a deal is possible, and

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<v Speaker 3>what shape would that deal take. Nothing is known at

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<v Speaker 3>this point and that makes it very difficult.

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<v Speaker 2>For no doubt about that. Today the White House did

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<v Speaker 2>warn of big tariffs. I think the spokesperson was referring

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<v Speaker 2>to the reciprocal tariffs that we're expecting next week. Today,

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<v Speaker 2>I was struck by the fact that double line capitalist

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<v Speaker 2>Jeff Gunlock was saying these tariffs could very well be inflationary.

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<v Speaker 1>Now.

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<v Speaker 2>FED Chair j Powell seemed to concede that point yesterday,

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<v Speaker 2>although the term that he applied to tariffs being inflationary

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<v Speaker 2>was transitory. Now we know where we've been when the

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<v Speaker 2>FED has used that term in the past. How do

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<v Speaker 2>you expect the tariff's story to contribute to inflation if

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<v Speaker 2>at all?

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<v Speaker 3>Terriffs will be inflationary if they're maintained, if they're kept

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<v Speaker 3>long enough, if they're just a tool to get a

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<v Speaker 3>trade deal, and they are on the here a few

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<v Speaker 3>months and then gone, then they don't usually show up

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<v Speaker 3>in the data because most of the resellers will absorb

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<v Speaker 3>that that that monthly bump in their in their margins,

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<v Speaker 3>So they really have to be there for a long

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<v Speaker 3>period to be inflationary. What they can do in the

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<v Speaker 3>short term, though, is raise inflation expectations among consumers, which

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<v Speaker 3>will some of them will try to jump the gun

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<v Speaker 3>on some purchases, and that could lead to, you know,

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<v Speaker 3>a lit a bump in or short term bump in

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<v Speaker 3>inflation because people rush to buy things before they take effect,

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<v Speaker 3>but that is transitionary in impact.

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<v Speaker 2>So Olivier imagine that the tariffs last a couple of months.

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<v Speaker 2>Perhaps does that necessarily force central banks in Asia to

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<v Speaker 2>consider adjusting their policy when it comes to currencies.

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<v Speaker 3>But a lot of them are, you know, peg to

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<v Speaker 3>the dollars, so obviously they need to follow what the

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<v Speaker 3>Fed does in that sense. But if the you know,

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<v Speaker 3>if the Fed things terrists are inflationary, they will maintain

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<v Speaker 3>the interest rates where they are, which is which is

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<v Speaker 3>quite a restricted level at this time. And that's the

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<v Speaker 3>problem for a lot of the deptors in Asia who

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<v Speaker 3>have US dollar bonds out that are expiring this year

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<v Speaker 3>or next year, and they need to start rolling that

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<v Speaker 3>debt over at a much higher interest rate than when

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<v Speaker 3>they first took it out.

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<v Speaker 2>So oliviate. Today we had the CPI data for Japan

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<v Speaker 2>coming in a little above forecast in the same week

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<v Speaker 2>that we had the BOJ meeting, and Governor uwaita sounding

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<v Speaker 2>a little relaxed in terms of the move that we

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<v Speaker 2>have seen the upward push and yields on jgb's He

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<v Speaker 2>didn't seem to be too alarmed by the fact that

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<v Speaker 2>that appreciation has been happening pretty quickly. Are you in

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<v Speaker 2>the camp that we're going to get a BOJ rate

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<v Speaker 2>hike in May?

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<v Speaker 3>I think yes, this is something they should have done already.

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<v Speaker 3>In my book, inflation has been above the two percent

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<v Speaker 3>target for what eight nineteen straight months now, and they're

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<v Speaker 3>still reacting very slowly. And I think the danger is

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<v Speaker 3>for them to have this kind of lack of communications

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<v Speaker 3>with market where they say we're not alarmed, we're not alarmed.

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<v Speaker 3>Then they raise rates and everybody gets get spooked, and

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<v Speaker 3>that's what happened last August. So they need to communicate

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<v Speaker 3>more clearly about what their plans is so that markets

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<v Speaker 3>have time to adjust in a disciplined fashion.

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<v Speaker 2>How would you evaluate risk assets right now? In Japan?

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<v Speaker 3>So there's been a lot of you know, Japan had

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<v Speaker 3>with the second best market last year with the US,

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<v Speaker 3>there's been a lot of people that are looking at

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<v Speaker 3>moving money around. We don't know yet what the situation

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<v Speaker 3>is between US and Japan. That hasn't even been discussed yet.

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<v Speaker 3>So well, there be terrorists on Japan, we don't know.

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<v Speaker 3>We know that Donald Trump would like a weaker dollar

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<v Speaker 3>therefore stronger in so that might be negative for the

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<v Speaker 3>Japanese market, so would hire bog interest rates. So I

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<v Speaker 3>think Japan is probably peaked in a sense in my

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<v Speaker 3>mind last year, both economically and in terms of the market,

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<v Speaker 3>and I think people are looking at relative that you

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<v Speaker 3>to move out of this expensive market into cheaper ones.

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<v Speaker 2>I'm curious as to how you're feeling about Japanese tech

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<v Speaker 2>talks in particular. We've talked a lot on this program

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<v Speaker 2>about the deep Seek moment in China and the ripple

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<v Speaker 2>effect that it created around the world. So when it

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<v Speaker 2>comes to Japanese tech shares, how are you feeling.

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<v Speaker 3>So Japan benefited from the decoupling that the US is

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<v Speaker 3>trying to do with its especially tech supply chain away

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<v Speaker 3>from China towards more you know, US friendly countries and

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<v Speaker 3>in age of pack Japan is the only signatory to

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<v Speaker 3>some of their defense treaties. So Japan was a big

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<v Speaker 3>benefactor of that, of that relocation, relocation of supply chains.

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<v Speaker 3>But it also led to a market that performed really well,

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<v Speaker 3>but was very, very concentrated, maybe just two sectors, industrials

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<v Speaker 3>and technology was the bulk of the move for the

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<v Speaker 3>NIK and I think those are getting a little bit

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<v Speaker 3>expensive now, and if the FED needs, if the BOG

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<v Speaker 3>needs to start raising rates and the YET starts to strengthen,

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<v Speaker 3>then those gains there are a bit at risk right now.

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<v Speaker 2>So what is your outlook for China in the meantime.

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<v Speaker 3>So, China, you know, has obviously very big structural problems

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<v Speaker 3>on its economic model, and I'm not sure that the

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<v Speaker 3>authorities yet know how to address them. They are those

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<v Speaker 3>supporting their market, they are creating this floor, they are

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<v Speaker 3>trying to reinflate their banking sector, They're trying to reinflate

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<v Speaker 3>some other parts of the consumption food. But ultimately they'll

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<v Speaker 3>wait until they hear from Donald Trump and where that

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<v Speaker 3>trade war is going to decide what kind of measures

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<v Speaker 3>need to be taken to to turn their economy around.

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<v Speaker 3>But it's going to be a very very tough fight.

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<v Speaker 3>I think that China is three years into potentially it's

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<v Speaker 3>last decade because it's still doing the old you know,

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<v Speaker 3>let's borrow more and increase the debt and ask the

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<v Speaker 3>banks to roll over the debt that a cheaper margin,

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<v Speaker 3>and that game is not scalable, and I think it's

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<v Speaker 3>reaching its end right now. So I would say China

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<v Speaker 3>has support of the government. Lots of money there that

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<v Speaker 3>they can throw at the stock market and create a

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<v Speaker 3>floor and create a better feeling. But ultimately, if the

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<v Speaker 3>US and China has a trade war, if the the

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<v Speaker 3>coupling of these two economies goes on, it'll be very

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<v Speaker 3>tough for China to turn that ship around.

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<v Speaker 2>What about the story on domestic demand? We have seen

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<v Speaker 2>the government take a number of steps to try to

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<v Speaker 2>improve that. Is it going to be enough to change

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<v Speaker 2>the narrative?

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<v Speaker 3>No, Because you know the top ten percent of earners

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<v Speaker 3>in chrying to make sixty percent of the retail sales,

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<v Speaker 3>you can double the other sixty percent, That doesn't really

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<v Speaker 3>move the needle in terms of the economic things. And

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<v Speaker 3>those ten percent are not rushing to the store right

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<v Speaker 3>now to exchange their old toaster for a new one.

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<v Speaker 3>They want to buy big ticket items. They want to

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<v Speaker 3>buy long term, durable things, and for that they need confidence.

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<v Speaker 3>They need reassurance that the economy is going to turn around,

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<v Speaker 3>that there is a plan to do better, that there

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<v Speaker 3>won't be a trade war with the US, there won't

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<v Speaker 3>be a war with Taiwan, that sort of thing, And

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<v Speaker 3>I think that's uncertainty is holding that segment of the

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<v Speaker 3>consumption back and that's the bulk of it.

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<v Speaker 2>So, Olivia, your challenge now is to formulate an investment strategy.

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<v Speaker 2>Given everything that we've described, give me something that you

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<v Speaker 2>think will succeed in the next six to nine months.

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<v Speaker 3>So what we've seen is a lot of rebalancing has

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<v Speaker 3>already happened since about mid December, when investors went into

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<v Speaker 3>twenty twenty five thinking betting on growth, betting on momentum.

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<v Speaker 3>They had a pro business president in the US, they

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<v Speaker 3>had a peaceful transfer of power, they had a Republican Congress.

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<v Speaker 3>They thought that growth was back on. And these are

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<v Speaker 3>kinds of assumptions are being threatened right now. Even inflation,

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<v Speaker 3>the assumption that inflation would keep going down is being

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<v Speaker 3>threatened right now. So we've seen a big rebalancing move

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<v Speaker 3>in the last two plus months towards more or defensive

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<v Speaker 3>assets and away from growth assets. So we now have

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<v Speaker 3>a situation where you have two times more risk averse

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<v Speaker 3>investors than risk tolerant ones in the market. So any

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<v Speaker 3>kind of shock, any kind of risk event, might create

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<v Speaker 3>a very big overreaction right now in the market, and

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<v Speaker 3>that's what worries us. But I would wait for that

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<v Speaker 3>to happen, because I think something is going to shock

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<v Speaker 3>the system. There's not enough confidence for people to hold

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<v Speaker 3>on very long right now that don't know if any

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<v Speaker 3>of their assumptions for twenty twenty five are going to

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<v Speaker 3>come through, and that's creating an environment where big drawdowns

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<v Speaker 3>or sharp drawdowns are likely. So I would wait for that.

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<v Speaker 3>I would say, for me, markets, equity markets right now

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<v Speaker 3>are buy on the dip thing, not chase the trend.

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<v Speaker 2>All right, So let's assume you're right for the moment

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<v Speaker 2>and there is some type of shock event. Does that

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<v Speaker 2>necessarily create a buying opportunity?

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<v Speaker 3>I think it does in the short term because as

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<v Speaker 3>we saw from from Nike's earnings and other earnings, earnings

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<v Speaker 3>and some of the economic data is coming in better

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<v Speaker 3>than feared, in some cases better than expected. So there

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<v Speaker 3>is still quite a strong economy underneath, and consumers would

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<v Speaker 3>like to keep spending. They just need to be given

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<v Speaker 3>a little bit more certainty about where all of this

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<v Speaker 3>is going. There's just so many things happening right now.

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<v Speaker 3>Geopolitics is a live show right now. It used to

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<v Speaker 3>happen once every decade. Now it was happening every ten minutes.

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<v Speaker 3>I think that's pooking people. But ultimately, the will to

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<v Speaker 3>spend and the will to invest is there. It just

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<v Speaker 3>needs a little bit more comfort.

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<v Speaker 2>All right, Olivier, We'll leave it there. Thank you so much.

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<v Speaker 2>Enjoy the weekend. Olivia Dossier is head of investment decision

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<v Speaker 2>Research for the APEC at Simcorp. Joining us here on

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<v Speaker 2>the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.

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<v Speaker 2>I'm Doug Chrisner. On Thursday, in the US, President Trump

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<v Speaker 2>reiterated his support for stable coin legislation and he called

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<v Speaker 2>on Congress to create simple, common sense rules. Let's take

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<v Speaker 2>a closer look now at the crypto space with Peter Chung.

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<v Speaker 2>He is head of research at Presto Research. Peter is

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<v Speaker 2>normally based in Hong Kong. Today is on the line

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<v Speaker 2>from Soul, South Korea. Peter, I'm glad you could make

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<v Speaker 2>time to chat with us now. President Trump seems to

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<v Speaker 2>be having a lot of influence over the market for

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<v Speaker 2>digital assets these days, and he's been promoting a few projects.

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<v Speaker 2>One is World Liberty Financial. We can talk more about

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<v Speaker 2>that in a moment. It was earlier in the month

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<v Speaker 2>that he signed an executive order calling for the creation

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<v Speaker 2>of a strategic bitcoin reserve. Give me your assessment of

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<v Speaker 2>this plan.

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<v Speaker 1>Yeah, so, what he has announced so far is that

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<v Speaker 1>there's going to be two things, Bitcoin strategic reserve and

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<v Speaker 1>a digital asses stockpile. Both of these two funds is

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<v Speaker 1>going to be funded through the common phiscated assets, which

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<v Speaker 1>is currently mostly held under the DOJ. Most of it

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<v Speaker 1>is actually bitcoin, but there's some small portion of a

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<v Speaker 1>non bitcoin digital assets as well. So what Trump has

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<v Speaker 1>ordered is to create two different set of funds, one

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<v Speaker 1>purely funded by bitcoin only and the other one with

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<v Speaker 1>non bitcoin digital assets. And the big coin Strategic Reserve

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<v Speaker 1>is going to be you know, he has ordered the

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<v Speaker 1>Commerce Secretary and the Treasury Secretary to figure out a

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<v Speaker 1>way to accumulate more through a bud neutral way. And

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<v Speaker 1>for digital asset stockpile, they've indicated that they're not going

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<v Speaker 1>to try to add anything more.

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<v Speaker 2>I know you've been in markets for quite some time,

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<v Speaker 2>I think more than twenty years professionally, so I want

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<v Speaker 2>you to give me your analysis as to whether or

0:12:57.320 --> 0:13:02.440
<v Speaker 2>not promoting a strategic bitcoin reserve, or even developing one

0:13:02.760 --> 0:13:06.160
<v Speaker 2>in any way would undermine the confidence in the US

0:13:06.280 --> 0:13:09.040
<v Speaker 2>dollar is the world's reserve currency. Isn't that a risk?

0:13:11.040 --> 0:13:13.600
<v Speaker 1>I know that there are some people who argue makes

0:13:13.640 --> 0:13:18.480
<v Speaker 1>that point, and I tend to disagree. There's no real

0:13:18.559 --> 0:13:22.800
<v Speaker 1>hard evidence that the existence of a bitcoin reserve is

0:13:22.840 --> 0:13:27.240
<v Speaker 1>going to lead to lack of declining confidence in US dollars.

0:13:27.280 --> 0:13:30.960
<v Speaker 1>I mean, we already have a gold strategy reserve. I

0:13:31.000 --> 0:13:34.240
<v Speaker 1>know it's the kind of the legacy of the past

0:13:34.480 --> 0:13:38.680
<v Speaker 1>financial system. But nonetheless, I think, you know, you cannot

0:13:38.880 --> 0:13:42.640
<v Speaker 1>just directly jump onto the conclusion that just because you

0:13:42.679 --> 0:13:47.360
<v Speaker 1>have another hard asset supporting or backing the US dollars

0:13:47.640 --> 0:13:49.800
<v Speaker 1>market is going to suddenly freak out and say that

0:13:50.960 --> 0:13:53.920
<v Speaker 1>this means that the you know, the US dollar is

0:13:53.920 --> 0:13:57.240
<v Speaker 1>not to be trusted. There are other factors that supports

0:13:57.400 --> 0:13:58.839
<v Speaker 1>the US dollar confidence.

0:13:59.120 --> 0:14:01.920
<v Speaker 2>Would there need to be some sort of regulatory regime.

0:14:02.000 --> 0:14:04.840
<v Speaker 2>I can only imagine this making the Fed's job, as

0:14:04.960 --> 0:14:07.640
<v Speaker 2>one instance, a lot more difficult.

0:14:07.880 --> 0:14:12.079
<v Speaker 1>First of all, it's gonna be under the Department of Treasury,

0:14:12.200 --> 0:14:14.679
<v Speaker 1>not under the FED, So I don't think FED is

0:14:14.720 --> 0:14:18.520
<v Speaker 1>going to be directly involved in managing this. So it

0:14:18.600 --> 0:14:21.240
<v Speaker 1>does not necessarily make the FED job more difficult in

0:14:21.240 --> 0:14:25.840
<v Speaker 1>my view. Remember, there is a legislative efforts to codify

0:14:26.320 --> 0:14:29.360
<v Speaker 1>bigcoin strategic reserve as well. So Trump is not going

0:14:29.440 --> 0:14:31.800
<v Speaker 1>to be in the White House forever. There's a you know,

0:14:31.880 --> 0:14:34.080
<v Speaker 1>in order to make this a more permanent thing, you

0:14:34.200 --> 0:14:39.200
<v Speaker 1>need legislations to support this, and that work is already underway.

0:14:39.520 --> 0:14:42.520
<v Speaker 2>What would be the effective other countries were to adopt

0:14:42.760 --> 0:14:46.160
<v Speaker 2>a similar strategy and set up their own strategic bitcoin

0:14:46.240 --> 0:14:50.320
<v Speaker 2>reserve or some other reserve tied to another cryptocurrency.

0:14:50.680 --> 0:14:53.840
<v Speaker 1>Well, I think the effect would be very positive for

0:14:53.880 --> 0:14:56.280
<v Speaker 1>the market, I think, and I think the likelihood of

0:14:56.320 --> 0:15:00.720
<v Speaker 1>that happening has gone up with the most powerful country

0:15:00.760 --> 0:15:06.920
<v Speaker 1>in the world giving visiitimacy to bitcoin as a strategy asset.

0:15:07.320 --> 0:15:10.000
<v Speaker 1>So I think, you know, when you think about this,

0:15:10.000 --> 0:15:13.360
<v Speaker 1>this is a huge development. It's something that the six

0:15:13.440 --> 0:15:15.560
<v Speaker 1>month ago, I don't think anybody would have kind of

0:15:15.640 --> 0:15:19.440
<v Speaker 1>imagined happening. So I think there's going to be a

0:15:19.520 --> 0:15:23.120
<v Speaker 1>similar conversation taking place in many other governments around the world,

0:15:23.720 --> 0:15:26.440
<v Speaker 1>and it's going to be a lot easier for them

0:15:26.480 --> 0:15:29.840
<v Speaker 1>to make an argument to own bitcoin as a strategy asset.

0:15:30.120 --> 0:15:32.640
<v Speaker 1>Then let's say six months ago, when you know, no

0:15:33.080 --> 0:15:35.200
<v Speaker 1>major government was actually doing it.

0:15:35.440 --> 0:15:38.800
<v Speaker 2>When cryptocurrencies were first introduced. There was a lot in

0:15:38.840 --> 0:15:44.480
<v Speaker 2>the conversation at the time around using these cryptocurrencies as

0:15:44.480 --> 0:15:48.640
<v Speaker 2>a means for conducting or transacting business. Right now, the

0:15:48.680 --> 0:15:52.800
<v Speaker 2>emphasis seems to be on holding them as anyone would

0:15:52.880 --> 0:15:56.080
<v Speaker 2>hold gold as kind of a reserve asset. Does that

0:15:56.240 --> 0:15:59.040
<v Speaker 2>surprise you, The fact that we haven't moved into a

0:15:59.080 --> 0:16:03.640
<v Speaker 2>world where we're used in cryptocurrencies to transact business more frequently.

0:16:04.560 --> 0:16:09.600
<v Speaker 1>That doesn't surprise me at all. Bigcoin is going through

0:16:10.000 --> 0:16:14.080
<v Speaker 1>three stages of becoming a money, and whether it end

0:16:14.160 --> 0:16:16.000
<v Speaker 1>up actually becoming a money or not, I don't know.

0:16:16.480 --> 0:16:20.320
<v Speaker 1>But these three stages are you know, they don't happen simultaneously.

0:16:20.600 --> 0:16:24.200
<v Speaker 1>It first needs to be adopted as a store of value,

0:16:24.720 --> 0:16:28.320
<v Speaker 1>and secondly, only after that you get a medium of

0:16:28.400 --> 0:16:31.240
<v Speaker 1>exchange stage, and the last one is the unit of

0:16:31.240 --> 0:16:34.760
<v Speaker 1>account stage. And so bitcoin is going through the first

0:16:34.800 --> 0:16:39.240
<v Speaker 1>stage of being adopted as a stove value and this

0:16:39.320 --> 0:16:41.880
<v Speaker 1>can take a long time. It's a multi decade process.

0:16:42.160 --> 0:16:44.240
<v Speaker 1>A similar thing happened with the gold as well. So

0:16:44.880 --> 0:16:47.760
<v Speaker 1>and right now I don't think it's it's wise to

0:16:48.000 --> 0:16:51.600
<v Speaker 1>spend your bigcoin as a medium of exchange because it's

0:16:51.640 --> 0:16:54.840
<v Speaker 1>going to be a very expensive spending ten years from

0:16:54.880 --> 0:16:57.320
<v Speaker 1>now if the bigcoin value goes a lot higher from

0:16:57.320 --> 0:16:59.920
<v Speaker 1>where it is. So right thing to do right now

0:17:00.280 --> 0:17:03.240
<v Speaker 1>is just hold on to your bit coin, don't spend it,

0:17:03.680 --> 0:17:08.080
<v Speaker 1>And after the adoption is more widely spread out and

0:17:08.200 --> 0:17:11.720
<v Speaker 1>the upside potential of a big cooin kind of peeks out,

0:17:12.080 --> 0:17:14.320
<v Speaker 1>and that's when you start thinking about maybe spending it

0:17:14.359 --> 0:17:15.680
<v Speaker 1>as a medium of exchange.

0:17:15.880 --> 0:17:18.400
<v Speaker 2>So maybe we can talk a little bit about President

0:17:18.440 --> 0:17:22.879
<v Speaker 2>Trump's World Liberty Financial. This is something I think that

0:17:23.000 --> 0:17:27.280
<v Speaker 2>his family is involved with and has endorsed, and from

0:17:27.320 --> 0:17:31.080
<v Speaker 2>what I understand, World Liberty Financial has just completed its

0:17:31.119 --> 0:17:34.159
<v Speaker 2>second set of token sales, raising about a quarter of

0:17:34.200 --> 0:17:38.000
<v Speaker 2>a billion total amount of coins now sold just over

0:17:38.400 --> 0:17:41.760
<v Speaker 2>around five hundred and fifty million dollars worth. Are you

0:17:41.880 --> 0:17:45.040
<v Speaker 2>concerned when you have something like this where the president,

0:17:45.400 --> 0:17:49.480
<v Speaker 2>who is obviously invested in the success of this project,

0:17:49.920 --> 0:17:52.199
<v Speaker 2>may have a little bit of a conflict of interest.

0:17:52.280 --> 0:17:55.040
<v Speaker 2>Does that concern you at all?

0:17:55.200 --> 0:17:58.200
<v Speaker 1>Yeah? I mean that's I mean, I generally in support

0:17:58.200 --> 0:18:01.120
<v Speaker 1>of everything that Trump is doing crypto space, but this

0:18:01.200 --> 0:18:04.719
<v Speaker 1>is one part where I wish that he didn't really

0:18:05.560 --> 0:18:10.280
<v Speaker 1>proactively engaged in because it does create room for some

0:18:10.840 --> 0:18:14.440
<v Speaker 1>potential problems down the road, So I think that White

0:18:14.480 --> 0:18:18.240
<v Speaker 1>House is trying their best to make everything transparent to

0:18:18.359 --> 0:18:21.120
<v Speaker 1>avoid any future problems. So we'll see how it goes.

0:18:21.160 --> 0:18:24.119
<v Speaker 1>But yeah, it's one part that I wish that the

0:18:24.240 --> 0:18:26.080
<v Speaker 1>Trump kind of was stayed away from.

0:18:26.680 --> 0:18:28.639
<v Speaker 2>So you're in soul at the moment, and I know

0:18:28.720 --> 0:18:32.240
<v Speaker 2>you travel frequently across Asia. Give me a sense of

0:18:32.359 --> 0:18:35.000
<v Speaker 2>how what is happening here in the States with crypto

0:18:35.080 --> 0:18:38.960
<v Speaker 2>policy is impacting the mindset of the people who play

0:18:39.000 --> 0:18:40.680
<v Speaker 2>in this space across Asia.

0:18:40.840 --> 0:18:43.640
<v Speaker 1>As I mentioned earlier, I think this definitely has prompted

0:18:43.720 --> 0:18:47.639
<v Speaker 1>a lot of conversations through many jurisdictions in Asia in

0:18:47.720 --> 0:18:51.399
<v Speaker 1>terms of how these governments in Asia will have to

0:18:51.440 --> 0:18:56.639
<v Speaker 1>approach the big cooin as potential strategy assets. And I

0:18:56.680 --> 0:19:01.760
<v Speaker 1>think every country is different, depending on their priorities, their

0:19:02.359 --> 0:19:06.840
<v Speaker 1>eventual approach will look quite different. And I think some

0:19:06.880 --> 0:19:08.840
<v Speaker 1>countries will be more proactive than others. And I think

0:19:08.840 --> 0:19:11.639
<v Speaker 1>the countries that will be more proctive are the ones

0:19:11.680 --> 0:19:17.360
<v Speaker 1>where they kind of see the value that the blockchain

0:19:17.400 --> 0:19:22.840
<v Speaker 1>technology delivers to their own economy and generally the open

0:19:22.880 --> 0:19:26.120
<v Speaker 1>economy that value is open financial system. I think it's

0:19:26.200 --> 0:19:29.480
<v Speaker 1>going to be a lot more proactive in adopting or

0:19:29.480 --> 0:19:33.359
<v Speaker 1>incorporating a blockchain into their system. But Hong Kong or Singapore,

0:19:33.560 --> 0:19:36.919
<v Speaker 1>which is the financial hubs and also our keenly trying

0:19:36.960 --> 0:19:40.040
<v Speaker 1>to compete against other financial hubs like the New York

0:19:40.080 --> 0:19:42.320
<v Speaker 1>or London, is going to be more proactive in trying

0:19:42.320 --> 0:19:44.719
<v Speaker 1>to adopt the blockchain as part of their financial system.

0:19:45.000 --> 0:19:48.359
<v Speaker 2>So would it surprise you if a country like China, Russia,

0:19:48.400 --> 0:19:52.040
<v Speaker 2>maybe even Japan, if those nations were to go about

0:19:52.080 --> 0:19:57.280
<v Speaker 2>accumulating bitcoin in the run up to any strategic bitcoin

0:19:57.359 --> 0:19:59.800
<v Speaker 2>reserve that may get created in the United States.

0:20:01.359 --> 0:20:03.840
<v Speaker 1>Yeah, I mean, I think out of the surprise that

0:20:03.880 --> 0:20:08.320
<v Speaker 1>these countries also embrace bitcoin, you know, as part of

0:20:08.359 --> 0:20:10.359
<v Speaker 1>their strategy assets. I mean, it can come in many

0:20:10.400 --> 0:20:13.639
<v Speaker 1>shape and forms. It may not necessarily be in the

0:20:13.720 --> 0:20:16.879
<v Speaker 1>form of a strategy reserve, but maybe their public pension

0:20:16.960 --> 0:20:22.520
<v Speaker 1>system may allocate some small portion to bitcoin, or maybe

0:20:22.520 --> 0:20:26.159
<v Speaker 1>they air sofverey wealth funds may allocate small portion to bitcoin.

0:20:26.240 --> 0:20:29.199
<v Speaker 1>Some people speculate that that has already taken place with

0:20:29.359 --> 0:20:31.680
<v Speaker 1>some of the Asian governments. They are under no obligation

0:20:31.720 --> 0:20:34.479
<v Speaker 1>to disclose their holdings, so maybe we may we simply

0:20:34.520 --> 0:20:38.360
<v Speaker 1>may not know about it, So I wouldn't be surprised

0:20:38.359 --> 0:20:40.160
<v Speaker 1>at all if that that that happens.

0:20:40.600 --> 0:20:40.879
<v Speaker 3>Uh.

0:20:40.960 --> 0:20:44.879
<v Speaker 1>And you know, I think that's all going to be

0:20:44.960 --> 0:20:48.560
<v Speaker 1>very positive for the digital uset prices.

0:20:49.000 --> 0:20:50.960
<v Speaker 2>Peter will leave it there, always a pleasure. Thank you

0:20:51.000 --> 0:20:54.600
<v Speaker 2>so much, Peter Chung. They're head of research at Presto Research.

0:20:55.119 --> 0:21:00.679
<v Speaker 2>Joining us here on the Daybreak Asia Podcast. Thanks for

0:21:00.720 --> 0:21:05.359
<v Speaker 2>listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.

0:21:05.680 --> 0:21:08.800
<v Speaker 2>Each weekday, we look at the story shaping markets, finance,

0:21:09.160 --> 0:21:12.239
<v Speaker 2>and geopolitics in the Asia Pacific. You can find us

0:21:12.280 --> 0:21:16.480
<v Speaker 2>on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere

0:21:16.480 --> 0:21:19.600
<v Speaker 2>else you listen. Join us again tomorrow for insight on

0:21:19.640 --> 0:21:23.800
<v Speaker 2>the market moves from Hong Kong to Singapore and Australia.

0:21:24.200 --> 0:21:26.679
<v Speaker 2>I'm Doug Chrisner, and this is Bloomberg