With the numero uno population figures and one of the largest economies globally, China is one of the significant forces in finance and technology and has a layered history with Bitcoin. The Central Bank of China is placing a lot of significance in developing the country’s digital currency.
Based on an article published in the PBoC run magazine China Finance last week, it was suggested that Beijing should increase the momentum of CBDC development to seize the opportunity in the global race to issue fiat digital currency. The article said that Beijing needs to push to internationalize the yuan and reduce the dependency on the worldwide dollar payment system. It also mentioned that Beijing should not ignore its advantages and move ahead in the digital currency arena, which has eventually become the ‘new battlefield’ of inter-country competition in global finance.
With two nations China and the United States, gunning for blockchain supremacy, “the tech cold war is here to stay, and China has a lot of advantage in its stride.” mentioned Ripple co-founder Chris Larsen in an opinion piece for The Hill recently. According to Larsen, Beijing has a “once-in-century opportunity to wrest away American control of the global financial system, including the ultimate goal of replacing dollars with digital yuan.” The American values of freedom and openness would take a backseat in the new order.
Many experts have voiced similar concerns. This is a new racing track. It is the cyber race of building and controlling the system and governance that will spearhead the digital economy. The race would include advanced technology like big data, Artificial Intelligence, and the Internet of Things. However, blockchain is the key, as noted by Chinese President Xi Jinping.
The article on China Finance also mentioned that data feedback from the People’s Bank of China would be helpful for the national monetary policy, particularly in the post-pandemic situation layered with economic challenges.
The article added that at the end of April 2020, the research unit of PBoC had filed for 130 cryptocurrency related patent applications, which includes issuance, circulation, and implementation. The research unit is currently undergoing a testing process of a digital wallet for the currency.
In the recent past Beijing announced a trial run of its digital currency in August 2020, in Shanghai, Beijing, Guangzhou, and Hong Kong, involving 400 million people, which is approximately 29 percent of the Chinese population. The PBoC is also considering using the digital yuan in the upcoming 2022 Winter Olympics. Both China and the United States have contested closely in the research and development of blockchain in the last few years. However, the United States still holds the most number of patents in blockchain despite Chinese firm Alibaba filing the most patents so far this year.