China has been criticizing cryptocurrency-related economic activities including crypto trading, mining, P2P loans, and ICO's. Despite President Xi Jinping's doubt on the use of cryptocurrency in its markets, China is currently developing its own secure blockchain-based digital currency.
China's IPR Daily showed that the People's Bank of China (PBoC) recognized 78 digital currency patents wherein 44 are blockchain related starting 2016. PBoC is currently the fifth most productive patenter globally. The company's Beijing-based Digital Currency institute currently hires developers and specialists to issue and distribute a blockchain-based currency.
Zhou Xiaochuan, PBoC's deputy governor, spearheaded the project. The main intention if the project is to protect the country from an asset that it couldn't control. The new cryptocurrency, contrary to the decentralized cryptocurrency which is globally used, being developed by China might give the country greater control over the lives of its citizens.
Mr. Fan Yifei is PBoC's current Deputy Governor. He announced these recent months that Chinese-controlled cryptocurrency would replace the country's fiat currency and it will assure that the bank is protected against risks of money laundering and other crimes once it is implemented.
Bloomberg's review claims that the Chinese government plans to track its citizen's everyday transactions. It will also mandate the banks to share all data related to loan applicants before approving all types of transactions. The PBoC has an authority to prohibit a financial institution in dealing with "blacklisted" companies. According to reports, the Chinese government plans to start a social credit system. Some claims that the PBoC plans to deny individuals from accessing financial services.
Bankers and politicians are currently seeking an alternative method of payment to reduce the United States dominance in the international financial markets because of the trade war. Recently, Sabrina Meng Wanzhou, Huawei's CFO, was arrested in Canada because of the case filed by the U.S. government.
According to the South China Morning Post, Richard Jerram, chief economist at Bank of Singapore, announced that President Trump is promoting an 'America first' policy making them unreliable in keeping its borders open for trade, or to rely on it to support the World Trade Organization or the International Monetary Fund. He added that it is understandable that countries are looking for substitutes. He added that in a world of fracturing of multilateral order, countries will be looking to reduce their dependence on the United States. China's proposed cryptocurrency might take form as a digital asset alternative for other nations.
