Crypto News

Doubts Surface Over China Central Bank Currency Plan

Doubts Surface Over China Central Bank Currency Plan

People’s Bank of China may be ready with the top-level rules for its hypothetical state-backed digital asset, but doubts are still surfacing over the project’s wider application.

China Central Bank Currency Meets Fresh Skepticism
The central bank has announced it will “continue its solid study on the digital currency and keep monitoring the latest development of digital currency initiatives around the world,”reported Ejinsight.
The next stage, according to Deputy Governor of the PBoC Fan Yifei, is to test the digital asset in a controlled environment in selected geographical regions, starting with Shenzhen. But the project’s application is now being met with fresh skepticism from ex PBoC officials.
The former governor of PBoC Li Lihui explained that distributed ledger technology may not be the best choice for backing a national currency.
If China is to launch its fiat digital currency soon, the scalability limitation and the transaction inefficiency of the current blockchain technology would render it unable to be used to meet the huge transaction demand of our nation’s digital currency, considering our massive retail market. Therefore, the PBoC should stay neutral towards the technology that underpins the digital currency, which will not be dependent on a sole technology platform
There are also concerns over the rate of progress, as it recently came to light that reports of the currency being ready by November were false.
Nevertheless, the digital yuan would be a strong reply to the forced dollarization ushered in by crypto assets. China has been open to digital currencies in the past, though the government has been vigilant to crack down on scams.
Digital Yuan Proposed as Answer to Facebook’s Libra
The launch of the PBOC-backed digital payment system was also an answer to Facebook’s bid in creating Libra, a stablecoin pegged to a basket of currencies. Multiple central banks were skeptical about Libra, fearing the loss of monetary policy sovereignty.
But there were skeptics within China’s regulators, taking more of a negative stance on a state-backed digital yuan.
Sun Tianqi, chief accountant at the State Administration on Foreign Exchange, was among the skeptics.
“In the short term, I hold a neutral stance with a negative bias. It has room in cross-border usage in theory, but it would be hard in practice,” Sun told a panel discussion at Peking University in Beijing on Monday, cited by the South China Morning Post.
From within the crypto space, a state-backed digital asset is also viewed with caution. Distributed ledger technology may offer anonymity and veiling, but may also be used in a way that tracks virtually all transactions, leaving a permanent record.
What do you think about China’s bid to create a state-backed digital asset? Share your thoughts in the comments section below!

Images via Shutterstock, The post appeared first on

How useful was this post?

Click on a star to rate it!

As you found this post useful...

Follow us on social media!

Related Crypto News

Stack Funds hails Bitcoin's 'healthy correction' predicts ‘euphoria’ ahead
Bitcoin could surge towards $100,000 next year following yesterday’s “healthy pullback”, with market psychology currently in the “belief” stage...
Renowned Finance Youtuber Andrei Jikh Invests Over $100K Into Cryptocurrencies
The popular Youtuber Andrei Jikh published a video this week to his 978,000 Youtube subscribers explaining that he invested...
Majority of Indian investors see 'no easy way to enter' crypto
Most mainstream Indian investors still do not see an easy way to enter the crypto markets despite recent regulatory...
Bitcoin Indicator Reaches Historical Extreme: Price Sheds Two Thirds Upon Reversal
Bitcoin price this week reached a high of $19,500, following a six-week, 60% rally. From the moment the first-ever...
Cointelegraph Consulting: Overwhelming bullish sentiment once again proves costly
Analysis of sentiment and on-chain data shows that a correction was likely to occur. Is there still room for...
Cypherpunk Holdings becomes 9th largest public holder of Bitcoin
Canadian holding company dumped XMR and ETH to fund its acquisition. Cypherpunk Holdings (CSE:HODL), a privacy-focused Canadian investment company,...

Featured Crypto News

Global search volume for Bitcoin appears higher than in 2017
Monthly global searches for Bitcoin are reportedly 350% higher than in late 2017. According to data collected by Brad...
Corporate Bitcoin frenzy: companies now hold $15.3 billion in BTC
Companies now hold over 842,000 BTC, which at the current Bitcoin price of $18,200, are worth $15.3 billion. As...
Ethereum Just Surpassed $500 For First Time Since 2018—Key Reasons Why
The price of Ethereum (ETH) hit $500 on Binance for the first time since July 2018. The timing of...
Charted: Litecoin Is Outperforming Major Altcoins, Why Dips Remain Attractive
Litecoin price is up over 10% and it broke the $80.00 resistance against the US Dollar. LTC is consolidating...
Bitcoin price doubles since the halving, with just 3.4M Bitcoin left for buyers
The Bitcoin price has doubled since the halving in May, with Chainalysis attributing much of the bullish price action...
TA: Bitcoin Prints Bullish Pattern, Why Close Above $18.2K Could Be Game Changer
Bitcoin price remained stable above the $17,500 support against the US Dollar. BTC is showing bullish signs and a...