China has become the latest country to take an interest in blockchain and cryptocurrency. The country revealed yesterday that they are now preparing to launch their own digital currency. The currency is reported to be a substitute for physical cash. Currently, no English translations are available for the official publications, but several details have already circulated on the internet.
Moving to a new digital national currency is something that the world would more or less expect from China. The country has already started to move to a digital financial world, and cash is already considered “dead” in China. They have already moved to digital payment solutions, such as Alipay, WeChat Pay, and other options. Now, China is getting ready for the next move into the future.
China Introduces Plans For New Digital Currency
This week, the People’s Bank of China has announced their plans to implement a new digital currency soon. This comes as an official and definite confirmation of the country’s plans. The data published by the bank revealed that they have been working on this digital currency since October 2017. After almost one year of careful consideration and planning, they have now decided to set their plans in motion.
The goal of the new digital currency is to act as a substitute for cash. Cash has already started to become a thing of the past in China. With the launch of this digital currency, cash could almost completely die off in the country, and the population may completely move toward a new area of finance.
The bank has not yet released any specific details regarding the digital currency, such as name or value. However, publications have revealed some valuable details that help in understanding China’s plans. The digital currency will be regulated by the People’s Bank of China. The bank has decided on this course of action due to the benefits associated with this approach. Said benefits include a reduction in overall operation fees. Moreover, a larger variety of areas can be covered with this type of digital currency, as compared to the existing financial options available in the country.
China Already Adopted A Digital-First Financial Approach
Even though launching a new national digital currency is news, this is not the first time that China has shown an interest in cryptocurrencies and the underlying infrastructure: blockchain. The China Central Bank Digital Currency Research Institute has recently applied for four patents that are related to the use of digital currencies. In total, more than 40 patents have been noted from this institute alone.
Apart from their interest in blockchain and digital currencies, China has already started to adopt a digital approach for financial management. Ten Pay, Alipay, WeChat Pay are only a few examples of this. Digital currencies and payment solutions are the preferred options among the Chinese population for making and receiving payments. A recent report by Forbes explained that the Chinese digital payment movement has already transformed into a trillion dollar market. With this new development, the country will further move into the future, where cash will no longer be what it used to be. Instead, we will use our phones and digital assets to pay for goods and services.
China Falls Behind In Terms Of Bitcoin Operations
One aspect that did come as a surprise is the timing of this announcement from the People’s Bank of China. On the 9th of July, 2018, just over a week ago, it was reported that China’s position in Bitcoin trading fell significantly. In fact, the publication announced that China has moved to below the 1% of the global totals for Bitcoin trading. This initially caused a concern that China may be moving away from cryptocurrencies. Yet, shortly after this report, the People’s Bank of China revealed their plans to launch a national digital currency.