The Chinese population is crazy about cryptocurrencies; bitcoin in particular, and though the government has banned all ICOs and cracked down on it major exchanges, it is now clear that it sees an opportunity to exploit in the raging rave. With this, Chinese central bank announced the government’s plant to roll out its own purely digital currency.
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Yao Qian, head of Peoples Bank of China made the announcement last week, saying that the government just concluded a test-run of the source code that the new digital currency will emerge from. He said initial phase of interbank transaction showed a lot of promise that the government decided to begin a pilot run in a few major cities.
The new digital currency will be the same in terms of being a legal tender to the Yuan, only that it only resides in digital wallets which will be controlled by commercial banks. The new digital currency can be used for direct payment. And the government says it will greatly reduce costs of transaction, as well as make them swifter. It is also noted that the new digital currency if widely accepted ill combat money laundering and other criminal acts that some banks are accused of participating in.
China has been hostile ground for cryptocurrencies for long and bitcoin in particular, with the new roll-out some industry watchers say this could finally reveal China’s end game in its crackdown of cryptocurrencies. Regulation of the industry is almost non-existent worldwide and this has begun to cause concerns even among cryptocurrency holders as its market cap is set to go beyond $200 Billion.
China might be the first to officially roll out a state owned digital currency, but it is certainly not the only one mulling the idea. Russia which is much more friendly territory for cryptocurrencies has in the past mooted the idea of creating a CryptoRouble.
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