The Strategist

China benefits from Bitcoin hike

04/05/2021 - 06:09

The rise in bitcoin's exchange price has benefited China and its digital yuan project, which is being actively pursued and promoted by the country's central bank, the People's Bank of China (PBOC), according to CNBC. This view is shared by monetary regulators in several countries.

Work on the implementation of the digital yuan began in 2014. The PBOC stresses that it is a digital version of fiat (traditional) currency, not a new cryptocurrency. The main characteristic of the digital renminbi will be its issuance by the central bank. The new currency will not be based on blockchain technology.

The digital yuan is expected to partially replace cash, becoming an additional - third - means of payment. According to the bank’s officials, interest in the digital yuan project is now very high. This is partly due to the fact that monetary authorities in various countries, such as Russia, Sweden, France and the European Union, are engaged in similar developments, and partly due to the rise in bitcoin prices seen in recent months.

Since the beginning of the year, the world's main cryptocurrency has more than doubled to $59,100.

At the same time, Chinese authorities have imposed strict restrictions on bitcoin and other cryptocurrencies. ICOs (the cryptocurrency equivalent of an IPO) are banned in the country, and exchange trading in cryptocurrencies is strictly controlled.