China Considers Creating a Digital Yuan-Based Exchange
The Chinese government is already looking into the possibilities of creating a digital assets exchange that will support the digital yuan. The exchange is planned to be located in Beijing and will be one of the State Council’s efforts to support financial services within the capital. This exchange will also serve to promote the use of the digital yuan, which is one of China’s major targets even as the war on Bitcoin and cryptocurrencies continues.
China is ahead in the race towards CBDCs
China is shifting gears and increasing efforts that are aimed at the realization of a Central Bank Digital Currency (CBDC) also known as the digital yuan. One of the recent efforts towards this realization is the demand by the state’s cabinet for faster trials of the new technology across the country. The cabinet has also compelled banks within the region to establish every necessary infrastructure with firms in connection with achieving this goal.
China remains the leader in the race of achieving a functional state-owned digital currency. The country started its own CBDC project in 2014 and has been relentless towards achieving its goal. Part of the efforts towards this realization is by eliminating the competition posed by Bitcoin and other decentralized digital currencies. At least, this is the suspicion of many people within the crypto space.
Crypto ban sustained in China
This elimination of competition has seen the Chinese government roll out a series of bans over the years and hunt down cryptocurrency practitioners. The crackdown took a new dimension in 2021, coinciding with the later stages of testing of the digital yuan, which is expected to be fully functional during the Winter Olympics in 2022.
A few months ago, the People’s Bank of China (PBoC) released a statement that effectively banned any crypto-related business from operating in mainland China. On the back of that, crypto mining firms that have already been under serious crackdown pressure were officially added to the “negative list”, banning foreign investment into such enterprises.
These efforts led to a mass exodus of crypto practitioners, including exchanges and miners towards more favorable societies. Therefore, so far, it appears that China is achieving its goals towards the elimination of Bitcoin and cryptocurrencies from its financial system.
Chains aims to become world blockchain leader
From another perspective, China is using the opportunity to establish itself as a leader in the blockchain space. Despite banning cryptocurrencies, China has continued to promote blockchain development in the country.
Earlier this year, the country’s Ministry of Industry and Information Technology in conjunction with the Office of the Central Cyberspace Affairs Commission issued guidelines for blockchain development. The goal of the government is to make China the most advanced nation in the world when it comes to blockchain integration in both the country’s economy and general society.
By creating a digital exchange, China intends to move closer to its blockchain goals. This will energize the digital yuan project and promote its interaction with other areas of the economy and financial systems. It will represent another milestone in the rapid movement of China towards the realization of its CBDC goals.
Details of this exercise are still sketchy but cannot be underestimated, especially as it involves efforts geared towards the promotion of the digital yuan.