The central bank of China is seriously thinking …
China’s central bank is seriously considering creating its own cryptocurrency
Although China does not recognize bitcoin as a legal tender and is even trying in every possible way to control this area of the market, it seems that the government has nothing against releasing its own digital alternative. This opinion was expressed by Yao Qian, director of the Digital Currency Research Institute run by the People’s Bank of China, who spoke at an event sponsored by the International Telecommunication Union this week. CoinDesk writes about this with reference to the local news outlet Yicai.
Qian reportedly described the benefits of a government cryptocurrency in vivid colors, which will stabilize the domestic fiat currency while at the same time strengthening the country’s financial standing. It is not surprising that, in contrast to the centralized cryptocurrency, he put bitcoin, which, in his opinion, does not have sufficient intrinsic value..
“The value of cryptocurrencies such as bitcoin is primarily determined by market speculation. Recognition of such a cryptocurrency as a real currency would be a disaster. And the lack of intrinsic value means bitcoin will never become a real currency, “Qian said..
After that, he continued to criticize public cryptocurrencies, saying that the deflationary nature of bitcoin, which is usually considered one of the main advantages of cryptocurrency, could become an obstacle to its further development. “The maximum issue volume of 21 million, like that of bitcoin, which, in addition, is reduced by half every 4 years, in fact, leads to the opposite process in the evolution of cryptocurrency,” said Qian.
At the same time, state digital currencies, in his opinion, have tangible economic value and help stabilize the position of fiat currencies in the market..
“The nature of government digital currencies is the government’s duty to society,” Qian says. “They are provided with the reliability of the state”.
The Institute for the Study of Digital Currencies was formed by the People’s Bank of China in June this year and is engaged in research in the field of digital currencies on the blockchain. Head of Department Yao Qian previously held the position of Deputy Director of Technology at the People’s Bank of China.
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