China Eyes A State-Owned Cryptocurrency

[kassia]

What happened
Early September, China banned ICOs and cryptocurrencies. A month later, Chinese official Yao Qian reportedly called for a state-owned digital currency.

That’s weird. Isn’t it against the law?
Looks like it’s not. Banning ICOs and bitcoins under the flags of protecting people from scam risks, Chinese government was in fact clearing up the space for a state-issued alternative.

What now?
Now Yao Qian – who is the Director of the Digital Currency Research Institute under the People's Bank of China – claims that a state digital currency will help to stabilize domestic fiat. Sure, that could happen. But not for long – knowing the Chinese market, cryptocurrency has all chances to completely replace yuan.

What can we learn from it
⚙️   China will have not only its own internet, but its own digital currency. And the global cryptomarket loses 1.3B users.
⚙️   Chinese approach is an example of an concept turnaround – we all thought that cryptocurrencies were meant to decentralize the world and economy…
⚙️   The time of fiat is ending – and governments have to create new formats for interaction.

https://t.me/yoken/53

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[merchantofzeny]

This has been the plan all along. Many people have been saying the Chinese will go this way. It seems the Russians also are planning to do the same. The US government on the other hand has not given hints yet that they will introduce their own. All states would eventually do this, it affords them better control of our finances.

[andrew24p]

We have always known China is going to  go the way of a state owned crypto currency, or just plain digital currency. It isnt going to have a fixed supply and they will be able to inflate it on the fly. They already are very integrated to using digital commerce with Wechat, so it isnt that much of a step from what is going on today.

[vaughn125]

Knowing how much chinese people love money and profit, it was prettg easy to see through their facades. Clearly this was their plan all along. They banned ICOs to clear up the space from worthless scammers, then launch their own crypto that they will use and legalize. Great idea by the chinese people. But was a bit too obvious.

I wonder what they would do if people wants to use crypto currencies more and start to disregard fiat? Or what if people protest because they hate crypto currencies? I would really love to find out what ghey sill be doing to address problems such as this that may come their way.

[Hydrogen]

Whether china can successfully issue crypto may be a question of whether a centralized state run by people with pro centralization mentalities can do a decent job running a crypto currency whose success and survival may depend upon being decentralized. The likely outcome is, whatever china issues wont be crypto at all but merely a form of state issued fiat which utilizes a blockchain. Thus eliminating many of the advantages that a decentralized crypto would enjoy. State issued crypto likely won't be able to compete with true decentralized crypto as state issued will likely be centralized with an open ended supply which would make it vulnerable to devaluation, inflation and in worse case scenarios hyperinflation as well.