People’s Bank of China’s Use of Cryptocurrency

People’s Bank of China has recently announced that it is ready to develop its own cryptocurrency. This bank started its research five years ago and is currently ready to develop its own cryptocurrency. People’s Bank of China is one of the three largest banks in the world and has taken a big step toward the world of cryptocurrency with this measure.
Mu Changchun, the deputy director of People’s Bank of China, in a report on August 10, 2019, reported that the intended Blockchain for developing the cryptocurrency of this bank has been successfully tested. Furthermore, Mu said that using only one Blockchain complex will not respond well for a country as large as China. Analyses show that the People’s Bank of China, in addition to a Blockchain complex, is going to use a two-layered operating system in order to execute this program. In this operating system, the People’s Bank of China will be at top and other commercial banks will be at the second executive level. According to a report published by Cointelegraph on August 10, the People’s Bank of China started its research on this cryptocurrency when American politicians did not show enthusiasm toward Facebook and the Libra cryptocurrency. In a collaboration with the company Libra, Facebook developed a new cryptocurrency with this name. Though, despite the remarks by Mu, there has not yet been a clear time for the launch of this system. Analyses show that in the recent conditions where the economic relationships between U.S. and China have become volatile, such a measure by China and increasing the speed of furthering this project could be a response to the policies of Trump. From the other hand, the government of China has banned the mining of Bitcoin. Ben Kaiser is a Bitcoin Watcher and researcher at Princeton University, has talked a lot about the threat of Chinese miners for the stability of Bitcoin market, and has considered this measure positive by the Chinese government for Bitcoin in the long run. But the fact that this restriction is concurrent with the People’s Bank of China coming close to developing its own cryptocurrency, shows that the Chinese government has had long-term policies with respect to U.S. and cryptocurrency. The aim of these restricting measures has been to control the ever increasing growth trend of decentralized cryptocurrencies. But in spite of all these restrictions, still the cryptocurrency trade is ongoing in China and most users have turned to foreign currency sources like Japan and Hong Kong. These measures have made the government of China to further its programs more precise and faster.
Most states have always considered the use of cryptocurrency unsafe. Many analysts think the reason for this matter is that states are looking into gaining unilateral control on cryptocurrencies. The Chinese government, in a serious step, is about to develop its own cryptocurrency. The question in many people’s minds right now is that which side will have the upper hand in this situation, China, the U.S. government or Facebook?
 

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