China’s digital currency continues to be one of the most anticipated events of 2020. With the Chinese government potentially rolling out its DCEP ( Digital Currency Electronic Payments ) by year end, many believe it could apply significant pressure to other currencies across the globe. A recent Bitcoin pioneer actually believes that everybody will be using the DCEP in the foreseeable future – based on the advancements that China is making compared to other geographic regions.
China’s Digital Currency Progression
It has been clear for some time that China plans to internationalise the Yuan so that it can compete with the Dollar. China’s technological advancements and commitment to blockchain technology has arguably given the region a momentous head start.
Earlier this year, the market further discovered that China’s digital currency was going to be centralized. In a push to keep the currency regulated, the central bank will be in charge of creating and issuing the digital currency. They would then assist the Commercial Banks under them to ensure that the digital economy is firing on all cylinders.
It is important to note that a centralized model is completely different than leading cryptocurrencies like Bitcoin and Ethereum. In both digital assets, there is no central party involved in anything. With China introducing a digital currency that is centralized, it limits privacy, but ultimately fuels a digital economy where anybody with a smart phone can participate in a regulated manner.
China’s Digital Currency Coming To Fruition
Even in a year when the global pandemic has put a halt to many economic activities, China is still pushing their digital currency to the forefront. Back in April of this year, it was reported by Visionary Financial that China was testing their digital currency with McDonald’s, Subway, Starbucks, and many other companies. This was a significant development, especially since China had spend the last 4-5 years working on this infrastructure. In terms of a competitive advantage, there is really nothing like this happening in the United States. Businesses in the U.S could very well be testing individual cryptocurrencies, but you have not heard anything about companies testing a blockchain powered U.S digital currency.
Crypto Pioneer Believes This Is Massive For China
According to a recent report by BBC, an individual by the name of Chandler Guo believes China’s digital currency will eventually become a dominant global currency. Chandler Guo is a power player in the crypto markets, based on the Bitcoin mining facilities he was operating.
According to Guo, his Bitcoin mining machines were able to mine around 30% of the world’s Bitcoins.
With the advancements China has made on its DCEP compared to other geographic regions like the USA, Guo believes that the DCEP will easily penetrate U.S markets. He supports this theory by referencing population metrics. According to Guo, 39 million Chinese people live outside of China. If the DCEP is launched and is successfully interconnecting Chinese citizens, the DCEP then has the possibility of becoming an international currency.
According to the report by BBC, a crypto observer by the name of Bitfool stated that:
“The Chinese government believes that if some other countries can also use the Chinese currency it can break the United States’ monetary sovereignty. The United States has built the current global financial system and the instruments.”
With many people predicting that China will launch the DCEP by year end, an analyst from Beijing-based Trivium commented stating that:
“It’s hard to predict the timeline but the People’s Bank of China is under a lot of pressure to accelerate the development because they do not want to be in a world where Libra (Facebook’s digital currency) becomes the global currency, which they think is worse than the current global financial system controlled by the US.”