The Chinese government is looking into developing a blockchain-based digital currency for the yuan. This would be a big step in the nation’s currency overhaul. What does this mean for cryptocurrency? Should you invest in the new crypto or use the current methods?
China has been exploring embracing blockchain technology for years now and is already using it to process cross-border transactions. With this level of progress, China could be on track to develop its own cryptocurrency that would rival Bitcoin and Ethereum. Keep reading to find out what this means for your wallet and what might happen if China implements a decentralized digital payment method.
China’s New Yuan Coin on Blockchain
China’s government has been exploring the use of blockchain technology for years. With the potential to make transactions more transparent and efficient, China is one of the most anticipated countries to implement a digital currency.
The Central Bank of China (CBC) issued a statement in 2016 about developing an RMB-based blockchain. And if recent developments are any indication, it looks like China is finally making headway towards that goal.
As reported by Reuters, the CBC has set up a new research team that will look into how central banks can issue digital currencies on blockchains. The goal would be to create a digital version of the yuan coin on blockchains so citizens could use it for cross-border transactions.
The Implications Of A Chinese Yuan Coin On Blockchain
China’s consideration of a digital currency comes at an interesting time. Cryptocurrency has been on the rise recently, with Bitcoin trading up to over $4,000 USD per coin and Ethereum sitting around $400 USD per coin. This spike in prices has given China’s possible move some analysts are calling “conspicuous timing.”
One of the implications of the new cryptocurrency is its potential effect on blockchain technology. Blockchain is an anonymous, decentralized ledger that stores data across a network of computers rather than centralized data storage points. A crypto-payment system would provide Chinese banks with information they need to monitor their balance sheets more effectively, which could help improve transparency and prevent fraud.
The yuan coin could also drive innovation in China by incentivizing individuals and companies like Yuan Pay Team to adopt blockchain technology. Blockchain would allow people to track every transaction they make without having to rely on a third party like a bank or credit card company for verification and clearance because it provides accurate recordkeeping without any single point of failure or control that makes it easier for businesses and individuals to participate in ecommerce and other transactions.
Should You Invest In The New Cryptocurrency
China’s digital currency would be centralized and controlled by the government, which means it could potentially reduce the risk of fraud. But would this cryptocurrency be better for your investments?
China’s new currency might not be as decentralized as other currencies like Bitcoin, but it would still be a step in the right direction. If you’re looking for a stable currency to invest in, China’s new currency might not be the best choice.
The Chinese government would have complete control over the digital currency and any transactions that happen with it. This type of centralization isn’t what you want if you’re looking to make a lucrative investment.
But if you’re okay with a centralized system, China’s new currency may be worth investing in. It’ll most likely increase in value as more businesses start accepting it as payment and more people trust its stability. With increased trust from citizens, this is an investment that may lead to high returns.