China has made another important announcement on the expansion of its Blockchain project across the FX markets. While China is very close to the launch of its Digital Renminbi, the two state run blockchain projects have already gained a lot of friction.
The two major state run projects are: Greater Bay Area Trade Finance Blockchain platform and the SAFE’s Blockchain based cross-border financing pilot platform. The former is focused in HK and Macau, latter is concentrated in the Chinese provinces with over 20 commercial banks.
SAFE’s Blockchain Platform
According a recent report, since it’s release in March, SAFE’s platform has already processed 6,370 transactions as of the end of October, including issuing $6.8 billion worth of loans. Moreover, the Greater Bay platform has also processed over $5 billion worth transactions.
The primary aim of the project is to decrease the dependence on human validation and decreasing the processing time. It potentially reduces the cross-border transaction time from 2-3 days to about 15 minutes.
After successful implementation domestically, the Chinese are now looking to expand their efforts to the foreign exchange markets.
Lu Lei, deputy head of the State Administration of Foreign Exchange (SAFE) told the media,
“We will gradually expand the scope of the pilot and the application scenarios of blockchain technology in cross-border financing and macro prudential management,”
Furthermore, on cryptocurrencies, Lei acknowledges the growth of cryptocurrenies in foreign exchange. Hence, along with the expansion of its state run projects, the regulators will also research around the current scenario. Lei notes,
“At the same time, (the government) will push forward a prospective study on foreign exchange reforms to deal with cryptocurrency and explore the construction of the foreign exchange regulation and technology system under the new situation.”
According to crypto-analysts and popular opinion, China is currently leading the growth of the blockchain space. The country’s crypto investors have also has a dominating effect on the price. Due to the widespread support from the government, the retail space in China is far more comfortable with it than the west.
The Chinese have involved in more Ponzi scams this year than the west, as the viability of blockchain and cryptocurrency in the country has also increased.
Do you think that Digital Renminbi will take over USD dominance or cryptocurrenices will thrive over both? Please share your views with us.