China is one of the many countries that have been actively defining rules around cryptocurrencies. At the PBOC’s (People’s Bank of China) Currency Gold and Silver Work Video and Telephone Conference, organized on 28th March, it was announced that they would continue to work on developing the nation’s own digital currency, along with the strict regulations on cryptocurrencies in general.
About the national cryptocurrency
The digital-only currency concept designed by the national bank of China, is tentatively called “DCEP” for ‘digital currency electronic payment’. While the objective behind introducing the new digital-currency is bringing efficient, convenient, fast, and secure transactions and payments to the masses, the underlying technology might not be completely similar to that of an actual cryptocurrency. China’s national cryptocurrency could be based on distributed ledger technology, or on an existing electronic-payment technology without having any actual physical evidence of currency.
What is the need for a national cryptocurrency?
There is a lot of skepticism behind this advancement towards China creating its own national cryptocurrency. While many think this could be just an effort towards protecting the value of the national fiat currency, the Yuan, a few others hold the opinion that this could control the pool of currency-miners in the country, given currency-mining is currently regarded as an illegal activity in the country. Some others also believe that this move is targeted at controlling the anonymous movement of assets outside of the Chinese borders and could curb the outflux of Chinese resources.
However, the Deputy Governor of The Peoples Bank of China, Fan Yifei stated that one of the objectives for the following year was to ‘solidly promote the R&D of the central bank’s digital currency,’ thus indicating that development of DCEP could be an inevitable technological advancement. Despite the Chinese Government cracking down on cryptocurrencies earlier, it sent a delegation to Australia to study how blockchain-technology can be leveraged to make developments to the national fintech industry in March, 2018.
China not the only one…
While fingers are being pointed at the confusing attitude of the Chinese Government, the act of developing a national currency is not an alien concept after all. Russia would join the bandwagon as the officials have released statements saying that they would like to develop a crypto coin up and have it running before the end of the summer-2018. In the past, Venezuela has promoted their commodity-backed Petro coin and Iceland had released a somewhat-official-national cryptocurrency named ‘Auroracoin’ in 2014.
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