If so, why now? China is close to rolling out one of the world’s first major central bank digital currencies at scale — sometimes referred to as the Digital Currency Electronic Payment, or digital yuan. “If it wants a digital yuan that works, it can’t ban crypto,” Lacalle says. Rather, it needs to show that its DC/EP is as attractive as a crypto alternative. The government is saying, in effect, that it isn’t going to ban or put the brakes on the growth of Bitcoin and other cryptocurrencies, which have been an ever-present risk for both China and other governments, Lacalle suggests. Connecting the dots: BTC and DC/EP
“Yes, I do see a change in tone” in China, “a softened and more open approach to considering the role of Bitcoin,” Kevin Desouza — professor of business, technology and strategy at Queensland University of Technology News School — tells Magazine. “I still do not see a full embrace of Bitcoin.” “Industry insiders called the comments ‘progressive’ and are watching closely for any regulatory changes made by the People’s Bank of China.”
“This is a very important development,” Daniel Lacalle, chief economist at Tressis SV, tells Magazine — one that involves a “significant change of heart” on the part of China’s government as it “separates itself from its former monetary policy.” To recap: On April 18 at a CNBC event at the Boao Forum for Asia, Li Bo, deputy governor of the PBoC — China’s central bank — said: “We regard Bitcoin and stablecoin as crypto assets. These are investment alternatives.” CNBC reporter Arjun Kharpal commented:
As things stand today, the rollout of a digital yuan would be an international failure, though it might succeed domestically. Outsiders would assume that the Chinese government wants to control it like it does its traditional yuan.
The Chinese yuan, as currently constituted, is used in very few international transactions. “It is underutilized globally because China maintains capital controls,” Lacalle tells Magazine. China has long feared that if it were to drop these controls, its economy would quickly become “dollarized” — i.e., its citizens would send dollars away from China to the United States. What exactly, though, is the connection between Bitcoin and China’s DC/EP? Aren’t they two different things — one an emerging global store of value, like gold, and the other a domestic payment system?
The News Highlights
- Is China Softening With Bitcoin? A change of phrase shakes the cryptographic world – Cointelegraph Magazine
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