The Chinese government has been cracking down on cryptocurrencies for years. First, in 2017, when the Initial Coin Offerings’ (ICOs) hype was at its peak, China banned the “fundraising scheme”.
Soon after that, the government blocked all websites related to cryptocurrencies and ICOs. Also, the situation with crypto exchanges isn’t much better. In fact, exchanges can’t operate in the mainland of China.
This led many exchanges like Binance, to ask for refugee in more crypto-friendly countries such as Malta.
Recently, the Chinese government proposed banning all cryptocurrency mining activities within China, confirming once more that the government isn’t a fan of anything related to cryptocurrencies.
Moreover, Chinese crypto laws are strict. Financial institutions don’t accept bitcoin and other cryptocurrencies as legal currencies.
Then, in the middle of restricting everything cryptocurrency-related, China’s central bank announced the release of its native cryptocurrency.
China’s central bank is ready to launch its cryptocurrency
The information about China launching its native digital currency showed up in a report on the English-language news portal China Daily. Chinese Communist Party owns this news portal.
According to the report the launch was announced on a forum held by the China Finance 40 Forum over the weekend in Yichun, Heilongjiang.
At the forum, Mu Changchun, an official from People’s Bank of China’s payments department, said that the launch day is soon, probably sooner than Facebook’s digital coin Libra.
The name of China’s cryptocurrency is unknown. What we know is that the cryptocurrency is government-backed, and it’s in a testing phase.
During this phase, eight institutions will receive the cryptocurrency, including tech giants such as Alibaba and Tencent. The plan is that these companies will help distribute the cryptocurrency into China’s economy.
Chinese national cryptocurrency, however, isn’t what you could call decentralized. In fact, the People’s Bank of China will have full control over the cryptocurrency, and it will give the government control over its digital financial system.
Sources from the central bank explained that users would download a mobile wallet and exchange their yuan for the digital currency. The central bank would track every transaction.
According to the Forbes’ sources, the launch date is on Singles Day or November 11.
The announcement of Libra cryptocurrency has raised concerns of having central banks globally, including Chinese. But banks aren’t the only ones concerned. In fact, Binance, one of the largest crypto exchanges announced the release of its native cryptocurrency called Venus.
Then, Walmart, an American multinational retail corporation, revealed that it’s working on stablecoin.
China’s laws and bans have had a huge impact on the crypto space. However, the launch of China’s national cryptocurrency will also have a large impact, and it even can improve the position of digital currencies within the country.
However, the conclusion is that Chinese cryptocurrency won’t be similar to bitcoin and Ethereum, and it won’t even be like Libra, although the two digital currencies have similarities.
It seems that the People’s Bank of China is developing its own version of cryptocurrency.
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