Will Renminbi become China’s very own cryptocurrency? The negative relationship between China and cryptocurrency is no secret, with the country’s recent ban on Bitcoin mining (if you missed that article check it out here). China’s Cyberspace Administration even has new regulations for websites and mobile apps of blockchain companies; that requires them to allow authorised access to information stored. Now with this kind of negatively awkward relationship between China and cryptocurrency and Blockchain in general; one would wonder why they are considering making Renminbi the Country’s official cryptocurrency. Let’s find out.
The Blockchain Research Institute’s executive chairman Donald Tapscott told Bloomberg in an interview held on the 17th of April; that Renminbi (RMB), which is the official Chinese currency, will become the country’s very own cryptocurrency. Donald went on about how he’d just had a meeting with the Vice Chairman of the Chinese Communist Party. In the meeting, the Vice Chairman spoke for the president of China and expressed his opinion of blockchain. Xi Jinping has a strong belief that blockchain will be a major part of the country’s future.
Moreover, Donald expressed how he thought that ultimately decentralised exchanges would rule over centralised exchanges due to their supposed ability to identify suspicious activities, thereby promoting transparency. Tapscott also said that assets such as securities and other traditional assets; will supposedly be on decentralised exchanges.
It appears that despite how Tapscott supports the idea of Renminbi cryptocurrency, he believes China won’t be the only country to develop its own cryptocurrency. In his book, he mentioned how Canada urges banks all over the world to “ seriously study implications of changing national currency systems into digital money.”
Is it bad timing for Renminbi Cryptocurrency with the Chinese Authorities being hard on crypto?
We all know that the Chinese Authorities have been quite tough on both cryptocurrency and blockchain technology. With the banning of initial coin offerings (ICO) in the past; and now having cryptocurrency mining on the drafted list of; industry activities that are going to be shut down for safety and environmental purposes. But no it is not necessarily a bad time to introduce Renminbi Cryptocurrency; in fact Donald believes that these situations could work in favour of the currency conversion.
As one of the world’s largest crypto markets, turning Renminbi into Renminbi cryptocurrency will be beneficial to Chinese citizens; as they will have a cryptocurrency that all merchants and individuals will accept, making it the country’s most practical currency.
Final thoughts – Positive aspects of converting Renminbi to cryptocurrency
As it stands, the scalability of several blockchains is hindered by obstacles in; developing a completely functional and efficient currency; more so at the scale that China requires it. Nevertheless, the incentives offered by Blockchain technology and its capabilities are undeniably unique. Therefore converting Renminbi into a cryptocurrency would introduce a digital ledger amid corporates, local governments and individual citizens.
Moreover, since the PBOC’s private blockchain will keep a record of capital flows; the central bank would then have an amazing capital control mechanism. Also, there will be dependable tax collection references. That being said, a cryptocurrency backed by a central bank; could be a step in the right direction to fulfilling vital national interests. Whether diving into national currency digitalisation is the right or wrong move; for the better of our future generations; time will tell.