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People don’t always lump the idea of China and its strict control issues with something as potentially volatile and uncontrollable as cryptocurrency. Why would China even consider it?
An economic powerhouse like China will always be looking for new ways to improve its monetary dominance, so we can see how China would be keeping a leg up on the extensive competition.
I’m just wondering whether the Chinese government’s interest in cryptocurrencies, particularly its own, will enable usage of the digital funds by the common people.
China’s Very Own Crypto
So is this new crypto going to be separate from the cash Yuan or a replacement? Some sources are saying it’s to be a replacement for cash, rather like CBDC.
That idea is rather a chin-scratcher for me. What about the many citizens of China with no online access? Will they be given cards? Surely, cash will still be acceptable. I guess I’ll have to wait and see.
Why China wants its own cryptocurrency could be argued. They want to stay on top of current technology, it involves a potential new revenue, new laws would mandate the world to adopt it, etc.
That last one has many concerned. If you want to buy or sell anything online with China in the future, you’ll have to adopt The Chinese Crypto. This is not the sort of thing that Satoshi Nakamoto had in mind, but we can assume (or can we?) that Satoshi was/is not Chinese.
Many people expected China to fully reject crypto as it can be a sneaky form of currency, hiding in a myriad of nodes across an invisible blockchain. Other governments banned its usage. And yet other governments would like to, but they know that it would be impossible to enforce.
Perhaps a bit of wisdom has permeated the Chinese government. They realize it is becoming more and more pointless to prohibit certain online activities when technology is such an enabler.
Whatever the reason, it quickly became a hardcore issue of the forefront of governmental interest after Facebook announced its intent for Libra.
In October of 2019, the Chinese government announced that it would be creating a People’s Bank Of China digital currency. Although no actual date for the release was stated, experts feel it could be toward the end of 2020.
As an aside, in April 2020, China will have a new blockchain. I would say, “Go China!”, but I’m not as happy as all that. I love the Chinese people – not so much their government.
This is probably the most significant question. The People’s Bank has not revealed details about how it will instigate the new currency.
However, their new blockchain will be an astronomical accomplishment. Proceeding from there should be a cakewalk.
China And Other Cryptocurrencies
Whether for the better or for the worse, the people of China owe much to Leon Li when it comes to keeping digital currencies acceptable in their nation. In 2013, Li co-founded Huobi, a digital exchange platform that remains one of the few crypto businesses to come out of China’s 2017 crypto crackdown unscathed.
When Li was informed that China was knocking down all manner of exchanges in China, he raced back to work from medical leave and had his team advise all investors to withdraw their funds. During this time he carefully briefed local regulators regularly and made sure to fully cooperate with all interrogations.
He employed other tactics, as well, for getting on Beijing’s good side. He hosted seminars and classes for officials, held conferences under government graces, and began consulting officials regarding Facebook’s Libra. Let’s not forget the fact that he made an in-house Communist committee for Huobi.
All this kissing-up to the powers-that-be saved Li’s business and made himself a trusted mogul in China. However, this has come at a cost of how he is perceived overseas.
Where Does Bitcoin Stand?
Yes, Bitcoin is legal in China. Like most – if not all – other countries, there is no governmental support of the coin. It is not accepted as legal tender.
Nonetheless, Chinese citizens can own Bitcoin and invest and spend it online. Feel free to start here and click around for more information. You’ll need to click on the translate button if you aren’t fluent in Mandarin.
Laws That Change
Let’s face it, we’re talking about China. This is a country with people who are now forward-thinking investors wanting more freedom. The government does not like this.
Ever-changing laws in the great nation reflect government paranoia over losing control over the citizenry. This may seem ridiculous to the rest of the world, but the powers that be don’t always see clearly.
As I searched for answers online, I learned that you need to be careful to find the latest articles about what’s going on in China. Trends indicate that, like with many other governments, something new can go unnoticed at first.
Then the government studies things, changes laws, adds taxes, bans things, realizes that doesn’t work, changes more laws, etc. Who knows, give me a few months and you may read something new about China.
Where From Here?
China and cryptocurrency have been fraught with a tenuous and unhappy relationship from the beginning. What the Chinese government may see as an infestation is generally harmless until they begin their paranoid analysis.
What do you think? Is China near and dear to you? Where will the laws change next?
Let us know your thoughts in the comments below!