China’s central bank is “close” to launching its own “cryptocurrency.” Will this historic moment pump bitcoin – or pummel it? | Source: REUTERS / Dado Ruvic / Illustration
China’s long-fabled “cryptocurrency” launch is finally on the horizon.
According to Bloomberg, People’s Bank of China (PBoC) payments department deputy director Mu Changchun confirmed at the China Finance 40 Forum that the country’s cryptocurrency is nearing its release following a year of research and development.
Given Beijing’s history of antagonism toward decentralized cryptocurrencies, what does the impending launch of a PBoC-approved digital currency mean for bitcoin?
China’s ‘Crypto’ Play Is About Restricting Freedom
China, which has had strict capital controls in place for many years to restrict the outflow of the depreciating Chinese yuan, is expected to use the PBoC-issued cryptocurrency to exercise even stronger control over the national currency.
By utilizing a centralized blockchain network or a system modeled after the blockchain, replacing cash in circulation with a digital asset would enable the PBoC and the government of China to better monitor -and control – the flow of the yuan.
Cash – by nature – is anonymous in that it is difficult for the authorities to scrutinize offline transactions made in a peer-to-peer manner. A digital system would ease the process for regulators to oversee so-called suspicious transactions.
However, whether it can truly be described as a cryptocurrency remains a separate issue as a blockchain protocol, as seen in the structure of the Bitcoin network, often demonstrates a certain level of decentralization through the presence of nodes and open-source communities.
Regardless, China’s so-called “crypto” project is about restricting freedom –