People Bank of China, the Chinese Central Bank believes the rising price of bitcoin has contributed to the growing interest in Chinese sovereign CBDC called digital yuan. The statement took many by surprise partly because cryptocurrencies are banned in China for almost 4 years now.
Wang Xin, PBOC research bureau director,
“On one hand, this is related to more and more central banks in the world participating in the development of domestic digital currencies. On the other hand, this (interest) may also be related to the large increase in the price of bitcoin.”
China’s upcoming sovereign digital currency is in the final stages of mass trials and could be launched anytime in near future. Being an authoritarian state, China banned crypto trading and crypto exchanges quite early and started working on developing the digital yuan as early as 2014, and it is currently years ahead of any other country working on its CBDC.
China Years Ahead in CBDC Game
The rumors of China’s CBDC launch have been going on since late 2019, but PBOC has offered a particular timeline for the launch. However, in these years, the trial phase of the digital yuan has expanded from a couple of cities to numerous provinces. The central bank had also initiated many airdrop programs with millions in digital currency distributed among citizens for testing.
As the popularity of blockchain and Bitcoin has peaked this bull season, many countries around the world are currently working on developing their own sovereign digital currency to stay ahead of the fintech curve. However, China is already ahead by years because of its early start, while most of the countries are still in the early sandbox phase. The digital yuan is not just completely developed it is also being widely tested for almost two years and the government has already developed a significant portion of the infrastructure for a mass rollout.