China is one of the places in the world where cryptocurrency has found it somewhat hard to thrive and this is because a ban on cryptocurrency that was instituted in the country in 2018 which led to many Chinese people using virtual private networks to trade in cryptocurrency despite the ban. The country has, however, gotten quite involved in blockchain technology even as the ban continues to linger.
Now it seems some form of crypto is taking hold within China as the people’s Bank of China has announced that their digital currency can now be said to be ready and this was according to the deputy director Mu Changchun who stated that a prototype that adopts blockchain architecture has now been deployed following 5 years of research. This announcement was made at the China finance 40 Forum.
Crypto in China
According to Mu, the creation of a cryptocurrency using a pure-blockchain architecture would make it hard to achieve in a country like China because of its size and because there is a requirement from retailers for high concurrency performance.
As such, the crypto will work with a two-tier operating system that will accommodate the nation’s complex economy as well as its large territory and population. The system will have the people’s Bank of China on an upper level as well as commercial banks on a secondary level and both will work hand-in-hand to ensure that the digital currency can function across the country. Mu has also stated that this will improve accessibility as well as enhance adoption rates among the public and promote innovation among commercial entities.
The currency will be suitable for small-scale retail high-frequency business scenarios and should be on the market at some point in the near future.
This upcoming currency has been called a threat to the United States mostly because China seems to be in a race to beat the United States who have their token launched ahead of the Libra token as both countries are currently engaged in a trade war of sorts and china might see this as a way to get an edge over the United States.
Once the people’s Bank of China’s currency as well as the Libra token is available on the market, it will be interesting to see how their uses differ.