China is considering launching a digital currency called DCEP. It will be stored in digital wallets owned by retail users and accessed through a central bank-authorized application. This will enable Chinese consumers to transfer digital yuan seamlessly through their phones. In the future, China is planning to integrate DCEP with Alipay and WeChat Pay, which already control 90 percent of China’s digital payments. It is anticipated that the new digital currency will replace a portion of the existing cash in circulation. However, in the short-term, the current channels of money supply will remain unchanged.
The new digital currency is not fully functional yet. Although it was launched in the app store ahead of the 2022 Winter Olympics in Beijing, it only topped the charts in Apple’s China App Store. It is still in beta form, and only supports payments in a few major cities. The price of the digital currency is lower than WeChat Pay.
China has declared that it will be the ‘rule-maker’ in blockchain. The country plans to launch a blockchain-based service network in April 2020. During a study session for Politburo members, Xi Jinping said that blockchain technology will be an important component in China’s race against the United States. The country has seen unprecedented growth in its blockchain sector in the last two years.
In addition to launching a Chinese cryptocurrency, there are also a few popular cryptocurrencies in the region. Those that are interested in mining or trading can consider buying Bitcoin or Ethereum. However, it is important to note that there are many risks involved in the Chinese cryptocurrency market. As with any other investment, it is important to understand that the price can fluctuate.
Chinese authorities have been cracking down on cryptocurrency related activities for years. They even banned initial coin offerings (ICOs) in late 2017. In September last year, the central bank issued a warning against foreign cryptocurrency exchanges, and two major exchanges – Huobi and Binance – pulled out. However, despite the ban, Chinese users are still able to invest in a number of cryptocurrencies, including Bitcoin.
The Chinese government has also been threatening to ban digital currency, and it seems that it is trying to make the crypto market more difficult for foreign investors to access. The restrictions on China cryptocurrency exchanges could be a sign of tighter outward investment rules for Chinese companies. In addition, the Chinese government has been targeting bitcoin since 2013.
The crackdown on cryptocurrency comes as the People’s Bank of China continues to tighten its regulations. The country has also prohibited financial institutions from offering services involving digital currency. However, the move to ban cryptocurrency is not entirely surprising because bitcoin is designed to be difficult to ban.