China’s long-awaited national cryptocurrency is one step closer to seeing the light of day. Although coronavirus has been the number one issue lately, China seems to continue to develop CBDC despite these events. And it seems to be successful.
Amid the Coronavirus pandemic, as countries seek to aggressively tackle the economic slowdown, China has used this crisis as an opportunity to move a step closer to its Central Bank Digital Currency (CBDC). According to a report by Global Times on 24 March, the People’s Bank of China (PBC) completed the development of the basic functions of the digital currency, and is now paving its way towards drafting and formulation of relevant laws to facilitate implementation.
According to the report, this has been done by liaising with various Chinese payment giants such as Alibaba, Tencent, Huawei, and China Merchants Bank. Alibaba’s payments platform Alipay has publicized five patents in relation to China’s digital currency. The patents cover various aspects of digital currencies including issuance, transaction recording, digital wallets, anonymous trading support and assistance in supervising and dealing with illegal accounts, industry media reported.
Cao Yan, managing director of Digital Renaissance Foundation believes that the involvement of private institutions is detrimental for more efficient development considering their rich experience in blockchain technology. Cao added that cryptocurrency plays a convenient role in translating a central bank’s zero and negative interest rate policy into commercial banks.
Although China has completed the technological development step, the next step, which is the legal aspect involving regulations and supervision, will be a lengthier process. But the important thing is that the solid base of the national digital currency is already finished.
China itself has a huge impact on the cryptocurrency market. Those who have been following cryptocurrencies for a long time know that what is happening in China in connection with cryptocurrencies can significantly affect cryptocurrency prices.