TL;DR Breakdown
- China is growing in influence.
- China is leading in the crypto race.
- China has prohibited all other crypto coins.
China’s cryptocurrency journey explained
China is very influential, mostly because most of the products we purchase are made in China. The US and China compete for influence on the culture and the industries of today.
China’s power is growing as the European Union has agreed to a more open market with China. According to Bloomberg, the move is a significant economic triumph.
The EU hurried the deal along, which was no surprise because the EU is trying to bolster its reputation as Brexit has had its toil on it. China is the perfect country to lean on as it grows in many ways, particularly, in the emerging crypto industry.
China’s cryptocurrency journey is ahead of the game and surpassing most other countries in its ability to grapple with the world of fintech. Many are still fathoming how the currency can be digital while China is operating a digital coin of its own.
China’s digital Yuan
On the 11th of October 2020, China had finished trials for its digital currency, the digital Yuan. It’s central bank-backed up the digital currency.
China’s cryptocurrency journey meant it was in the lead in the competition to launch a central bank digital currency (CBDC). In the trial, online red envelopes were distributed in China, which contained 200 digital yuans to 50,000 selected citizens.
China decided to launch its online currency amid fears that Bitcoin and Altcoins were becoming too popular and gaining too much influence. China was aware that cryptocoins posed a threat to their reserve banks and took action.
The Peoples Bank of China began working on their new currency in 2014. The cryptocurrency payment option requires a QR code to be used in shops around China and replaces money already in circulation.
Each digital transaction is validated with China’s bank making it different from Bitcoin and Altcoins.
China and cryptocurrency law
In October 2020, China drafted a law that made the digital Yuan legal while its competitors were outlawed. The central bank has even prevented gambling sites from operating with other crypto coins.
The law stated that the People’s Republic of China’s main currency is the Renminbi, which now exists in digital and physical form. Citizens cannot produce their version of the coin but must use what is already in circulation.
Anyone who breaks the law will get a fine, and their trading will cease.
When China makes a move, it considers it carefully, and it is always an intentional one. China never acts in a small way but in a way that makes the whole world stop and pay attention.
China’s cryptocurrency journey highlighted the urgency that central banks must act with when tackling threats such as cryptocurrencies. Cryptocurrencies are growing in popularity and affecting the circulation of fiat currencies worldwide.
China’s cryptocurrency journey to formulate a Central Bank Digital Currency is a major one that has prompted the world to consider whether it is necessary to join the crypto sphere.
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