By
Tolu Ajiboye
April 17th, 2024
Now China needs to establish a new payment system network to support its digital currency growth.
Almost a decade after cryptocurrencies were established, countries are now rushing to tap into the technology to enhance their respective currencies CBDC. China is arguably leading them as it touches the final rounds in implementing its digital currency – digital yuan. With the increased competition between China and the United States in global tech control, the country is rushing to implement the digital yuan to win the race.
China’s ruling government is seeking to implement the digital yuan in a bid to dethrone the U.S. dollar as the primary global reserve currency.
According to a post by the country’s central bank, the country needs to become the first nation to issue a digital currency in its push to internationalize the yuan and reduce its dependence on the global dollar payment system.
“Issuance and circulation of the digital currency would bring great changes to existing international finance. China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” the article in a magazine run by the People’s Bank of China (PBOC) stated.
China and Its Digital Currency
China has been piloting the digital cuttency in some of its projects, of which it seems comfortable to scale it to the international market.
With the increased global adoption in cryptocurrencies, the country, which is known for spying on its citizens for utmost control, needs its central digital currency more than ever.
The government will be capable of following transactions with much ease, hence having more control of its economy.
Central bank digital currencies are essentially not a threat to the digital asset industry, on the contrary they act as a symbiotic pillar. This is mostly so because digital assets are prone to high market volatility, most countries do not have clear policies on crypto assets, hence delaying the overall crypto adoption. With global central banks developing respective digital currencies, it will significantly enhance the interoperability of digital assets and the traditional financial system.
According to a post by Reuters, China needs to establish a new payment system network to support its digital currency growth.
The post also noted that a Central bank digital currency research unit has filed 130 patent applications related to cryptocurrency ranging from issuance, circulation to the application as of end-April. Whereby, those functions would form a complete supply chain to support the launch of digital currency.
Digital currencies will not only help revolutionize the financial market but also salvage the global environmental crisis. A lot of trees are consequently cut down to keep the paper printing industry up and running smoothly.
In addition, it will assist in reducing human contact that is the key factor in spreading viral deceases including COVID-19.