Photo credit: SupChina illustration
Will cryptocurrency from Beijing revolutionize global money? It could happen.
Blockchain, the technology behind cryptocurrencies, got a big boost in China last week, as the National People’s Congress passed a new law on cryptography a few days after Xi Jinping gave a speech urging “greater urgency in the development of blockchain technology.” Bitcoin surged to a value of over $10,000 in response to the enthusiasm from China.
And now, about two years after banning bitcoin exchanges and shutting down server farms that produced cryptocurrency in the country, China appears set to likely be the first country to launch its own sovereign digital currency. According to a speech by veteran official Huáng Qífān 黄奇帆, as summarized by investor Matthew Graham:
- The DCEP (central bank digital currency) would replace some of the cash in circulation in China, as opposed to existing cryptocurrencies that add on top of a country’s cash pile.
- We don’t know when it might launch, but it has been in development for five or six years and is maturing.
- This is NOT official support for bitcoin: this is a Chinese government initiative to launch a highly controlled digital currency that will not be anonymous. Nonetheless, cryptocurrency enthusiasts worldwide greeted the news with joy, and crypto purchases.
Get ready for the Beijing version of bitcoin: It could be the greatest change to how currencies are traded since, well, bitcoin.