China has finally decided to enter the digital assets market, with its own cryptocurrency. China’s has upcoming plans for their new central coin, this means quite a bit for the crypto market, especially as it is pretty much the first government to come out with something like this.
Russia was expected to be the first to launch a digital asset before any other country due to the Oligarchs influence in the space and their Presidents relationship with the founder of Ethereum, Vitalik. It was instead the People’s Bank of China who first received approval and has started to build its own digital currency. Hopefully this might insight other countries to maybe be more proactive when it comes to this field.
BREAKING: China has received internal approvals to create a central bank digital currency and has already started building it.
Let the global arms race for digital currency supremacy begin 🔥
— Pomp 🌪 (@APompliano) July 8, 2019
This isn’t completely surprising, as the Central Bank in China first mentioned this back in 2016 before Bitcoin ever reached its peak. China has stayed distant from cryptocurrencies as a whole due to the fact that it has a limited ability to control it, they would not want their economy or traditional market system to be disupted. By creating their own internal coin, they can now manage and control the crypto market state side. Chinese regulatory bodies could achieve this by continuing to ban any foreign stablecoin and fiat pairing to Bitcoin, Ethereum or any stable liquidity base pairing used to enter into the market.
Along with this another massive utility gained is a state run cryptocurrency with immense speed saved by sacrificing the decentralized nature of most public chains. There is no requirement of nodes communicating and holding the digital ledger system while achieving consensus, as a centralized currency bypasses this and can reach much much faster levels of transaction per second, saving potentially billions in transaction fees over time.
While this project hasn’t yet been realized, the potential implications of a centralized cryptocurrency is large, and seeing how China plays this out will be a very interesting insight in the potential future of the cryptocurrency market.