Crypto Update: China CB Goes Blockchain in 2018?

In this article I will discuss the possibility of China introducing the world's first central bank backed digital cryptocurrency in 2018.

It is starting to look extremely possible that in 2018 China will be the first major country to launch a central bank digital currency (CBDC). If that happens it will most likely correspond to a large-scale blockchain implementation in the retail and logistics industries and mass adoption of cryptocurrencies in Chinese companies.

But what factors could possibly go into this prediction? Let me explain further...

1.) Even though cryptocurrency exchanges were banned from China in September by China, the country is still very much interested in creating a central bank digital currency and blockchain. This can be proven by the government's ramped up research program supporting such an effort.

In Feb. 2016, for example, People's Bank of China (PBOC) president Mr. Zhou Xiaochun admitted during an interview that the Chinese government has been investigating the adoption of CBDC for a long time.

On Dec. 27 of that year, blockchain was written into the "13th Five-Year Plan for National Informatization." The government affirmed the value of blockchain, and it has since risen to the level of our national science and technology strategy.

2.) According to further research it appears China is almost ready to launch the first CBDC. This is supported by the fact that the PBOC has already set up a dedicated digital currency research group in 2014. They have been studying digital currency issuance and business operation frameworks that can support a new blockchain system for years.

3.) In January 2017, China's central bank tested the digital notes exchange platform. This is an extremely advanced system and makes it appear as if China is way ahead of the game when compared to other countries.

According to a paper published in Tsinghua Financial Review, a digital currency was used to exchange notes between commercial banks, including Industrial and Commercial Bank of China, Bank of China, WeBank, Shanghai Pudong Development Bank and Bank of Hangzhou.

In July, the Central Bank Digital Currency Research Institution officially began operating as a separate business unit within PBOC.

If you are familiar with China, this is how things work there as state and corporation have an unclear division between them due to the communist nature of the country. The CBDCR is China's new independent arm for launching digital currencies in the PBOC.

4.) This is a much needed strategic play for China. The Chinese CBDC compliments its Belt and Road Initiative, an integrated upgrade of China's international cooperation with the Eurasian Economic Union, China-Japan-South Korea Free Trade Area and other areas.

5.) There are benefits for China in releasing a CB digital currency because transactions with digital currency are more efficient and convenient. They eliminate third-party reconciliation and the automated implementation reducing payment costs and error rates.

Beyond that fact this will increase chances other countries would pay with RMB in transactions. This in turn will increase liquidity and internationalize the RMB.

There is a lot of evidence supporting China's move towards a Central Bank backed digital currency in 2018. Be ready to move because this my friends if it happens will be a game changer.

Smart money always gets there first so be smart and keep your eyes and ears open here.

What do you guys think about the possibility of the first government backed cryptocurrency in 2018? It this going to happen? Why or why not?

Thanks for reading @techblogger!

Source:
China on a Blockchain? Maybe in 2018 - CoinDesk

Image Source:
CoinDesk