In a so-called bid to stop money laundering and the abuse of currencies within the crypto circuit, China previously announced that it would use its firewall to block exchange markets and the ability to purchase ICO’s. Even as recently as this morning we took a look at how that restriction has actually made little difference in the booming cryptocurrency trade within the eastern superpower.
In a new turn of events, an announcement has just surfaced that might explain why the country has been placed under such frivolous restrictions.
The Chairman to The People’s Bank of China (PBOC) Zhou Xiaochuan announced during a press conference on Friday that the country is working on the creation of a digital currency for China. An online Chinese publication that covered Friday’s events states that these plans are going to be forged under a ticket called the DCEP, which stands for ‘Digital Currency for Electronic Payment’ and will focus on payment solutions.
Following speculation that has stemmed back to last year when Forbes reported that the country had already tested algorithms for a digital currency that would be used as a replacement to cash and contained in a digital wallet, the recent news is set to confirm that this development is now well underway.
Xiaochuan stated on Friday that the motives behind the move will be focussing on speedier transactions and payment services, however one must wonder whether a state-run digital currency also links to predictions that crypto payments will eventually overtake traditional cash payments worldwide. What’s more is that although the Chairman appears to maintain his stance that cryptocurrencies don’t serve the economy, whilst this currency will, it seems more than coincidental that the major rival cryptocurrencies have since been hit with China’s firewall.
Though the move will apparently not disrupt the central banking system, a state run cryptocurrency alongside President Xi Jinping’s recent abolishment of presidental terms clearly demonstrates a bigger press upon the already heavily regulated, monitored and censored country.
At the moment this triggers nothing but more questions. If the country was to have a state-run blockchain, who would mine it? What’s to stop a government manipulating the code anyway? Who would impose the regulations on the government scheme? And how long before China’s prospective digital currency, really, is pitted against the likes of Bitcoin?