{"id":223793,"date":"2021-04-10T14:24:00","date_gmt":"2021-04-10T11:24:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/"},"modified":"2021-04-10T14:24:00","modified_gmt":"2021-04-10T11:24:00","slug":"how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/","title":{"rendered":"# How the digital yuan stablecoin impacts crypto in China: Experts answer"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a27a7bc147e1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a27a7bc147e1\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/#Digital_yuan_vs_cryptocurrency\" >Digital yuan vs. cryptocurrency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/#Chang_Jia_founder_of_Bytom_and_8btc\" >Chang Jia, founder of Bytom and 8btc:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/#Daniel_Lv_co-founder_of_Nervos\" >Daniel Lv, co-founder of Nervos:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/#Discus_Fish_co-founder_of_F2Pool_and_Cobo\" >Discus Fish, co-founder of F2Pool and Cobo:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\/#Kevin_Shao_co-founder_of_Bitrise_Capital\" >Kevin Shao, co-founder of Bitrise Capital:<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># How the digital yuan stablecoin impacts crypto in China: Experts answer <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDMvOGZjN2JiNGItMjJlYy00ZTZiLWIwODQtOGU4ZjQyMjIzNDRjLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a><em>This is part one of a multipart <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> on blockchain and crypto in China.<\/em><\/p>\n<p>China has been discussing the possibilities of national digital currency for half a decade, and the Chinese digital yuan project \u2014 referred to as the Digital Currency Electronic Payment, or DCEP \u2014 has years of history. Back in 2014, the People\u2019s Bank of China <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2016-01-21\/chinese-central-bank-studies-prospect-of-own-digital-currency\">set up<\/a> a research group \u201cto study digital currencies and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication scenarios.\u201d The research team was conducting a digital currency study and reportedly considering issuing its own digital currency. In 2016, the PBoC <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.pbc.gov.cn\/goutongjiaoliu\/113456\/113469\/3008070\/index.html\">announced<\/a> plans to de\u00advelop a digital cur\u00adrency of its own and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.pbc.gov.cn\/renshisi\/144501\/144513\/144706\/3183358\/index.html\">started<\/a> to hire blockchain experts. The same year, Chi\u00adna\u2019s State Coun\u00adcil included blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> in its <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/en.ndrc.gov.cn\/newsrelease\/201612\/P020161207645765233498.pdf\">13th Five-Year Plan<\/a>.<\/p>\n<p>In 2017, the PBoC launched the Digital Currency Research Institute, which focused on the development and research of digital currencies. According to China\u2019s National Intellectual Property Administration (formally known as the State Intellectual Property Office), the institute <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/finance.ce.cn\/rolling\/201806\/29\/t20180629_29567884.shtml\">filed<\/a> more than 63 patent applications related to blockchain and crypto during its first year of existence alone. In 2018, a report \u2014 released by the Chinese Institute of International Finance, operated under the People\u2019s Bank of China \u2014 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/us-china-finance-digital-currency\/china-central-bank-will-launch-crackdown-on-virtual-currencies-idUSKBN1H515L\">indicated<\/a> that the central bank would institute a regulatory crackdown on all types of digital currencies. <\/p>\n<p>Back in July 2019, Wang Xin, director of the PBoC\u2019s research bureau, stated that <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a>\u2019s plan to launch its own stablecoin, Libra (now known as Diem), had <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.technologyreview.com\/f\/613932\/facebooks-libra-digital-currency-chinas-central-bank-on-high-alert\/\">influenced<\/a> China\u2019s plans to launch a digital form of the Chinese yuan. Back then, some experts predicted that the Chinese government-backed digital currency aimed to be rolled out earlier than the official launch of Libra.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>China\u2019s central bank developing own digital currency in response to Libra<\/em><\/strong><\/p>\n<p>Last year, the DCEP project made significant progress; meanwhile, the details of the project remained limited. While the question of whether being the first in launching a CBDC will be enough to win global reserve currency status remains open, China is clearly moving toward leading the charge into the digital economy.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>China\u2019s CBDC is about domestic dominance, not beating the dollar<\/em><\/strong><\/p>\n<p>This year alone, China started testing infrastructure for the digital yuan prior to its official launch and the Chinese city of Shenzhen provided a chance for its citizens to participate in a lottery event that aimed to encourage the adoption of the country\u2019s new central bank digital currency. Also this year, China completed the development of hardware wallets for the digital yuan project; the first one was produced by the Xiong\u2019an branch of the Agricultural Bank of China in Hebei and the second by the Postal Savings Bank of China. And earlier in March, the Bank of Communications and China Construction Bank conducted digital yuan trials at two major department stores in Shanghai.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Digital_yuan_vs_cryptocurrency\"><\/span>Digital yuan vs. cryptocurrency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A major <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/rogerhuang\/2019\/08\/14\/chinas-digital-currency-is-unlikely-to-be-a-cryptocurrency\/\">concern<\/a> among experts is that China\u2019s CBDC is unlikely to be a cryptocurrency. As was <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-09-10\/why-china-s-rushing-to-mint-its-own-digital-currency-quicktake\">underlined<\/a> by Bloomberg in 2019: \u201cThe PBOC will, of course, back the digital yuan, making it the opposite of decentralized.\u201d China\u2019s new digital currency will most likely be a centralized digital currency rather than a true cryptocurrency. As Shao Fujun, chairman of China UnionPay and a former PBoC official, said back in August 2019, China\u2019s state-owned digital currency \u201cwill have lots of positive impacts, including tracking the money flow in economic activities and supporting making monetary policy.\u201d<\/p>\n<p>Mu Changchun, deputy director of the Chinese central bank\u2019s payments department, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/us-china-cryptocurrency-cenbank\/china-says-new-digital-currency-will-be-similar-to-facebooks-libra-idUSKCN1VR0NM?utm_source=reddit.com\">said<\/a> back in 2019 that the forthcoming digital yuan would strike the balance between facilitating anonymous payments and preventing money laundering. He repeated the statement earlier this month, saying that a completely anonymous CBDC \u201cis not feasible\u201d because a national digital currency must meet requirements related to Anti-Money Laundering, Counter-Terrorist Financing and anti-tax evasion. Meanwhile, Chinese authorities are willing to ensure maximum user privacy for the country\u2019s central bank digital currency, according to Mu\u2019s recent statement.<\/p>\n<p>The question of whether the PBoC\u2019s currency will be like decentralized blockchain-based cryptocurrencies or if it will give Beijing more control over its financial system is an important one. Nonetheless, the development of the digital yuan has undoubtedly influenced the development of the digital economy both within and outside of China. Cointelegraph reached out to experts in the blockchain and crypto space from China for their opinions on the following questions: <em>How has the development of the digital yuan affected the entire crypto and blockchain industry in China? Will the Chinese CBDC stay centralized or gradually become decentralized over time?<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Chang_Jia_founder_of_Bytom_and_8btc\"><\/span>Chang Jia, founder of Bytom and 8btc:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cThe Chinese digital yuan is designed and launched by the PBoC (China\u2019s central bank). It is based on the construction of China\u2019s basic financial network for decades, and it is endorsed by state credit. Therefore, its birth undoubtedly encourages China\u2019s whole blockchain industry, especially those corporations that have been persisting in the underlying technology of blockchain, digital currency infrastructure construction, and industrial blockchain solutions for several years to see their future use, and even realize the great vision of listing on the STAR Market.<\/p>\n<p>At the beginning, the Chinese digital yuan DCEP focused on a trial operation in the CCB (China Construction Bank). After proving its basic operation, it will also get basic feedback from all walks of life and urban people\u2019s livelihood in China. With the gradual clarification and strengthening of DCEP in the national economy and the people\u2019s livelihood, such a huge digital currency system like DCEP certainly needs the joint construction of the state and the people in many aspects to create a new digital yuan network and to actively explore internationalization.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Daniel_Lv_co-founder_of_Nervos\"><\/span>Daniel Lv, co-founder of Nervos:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cThe fact that China is working on a digital yuan is proof that there\u2019s value in digital assets and the underlying blockchain technology. The primary purpose of introducing a central bank digital currency is to protect monetary sovereignty out of concern that Bitcoin and other cryptocurrencies will have an impact. The DCEP will also improve the efficiency of payment systems and enhance the convenience of yuan payments.<\/p>\n<p>Blockchain itself is a combination of many existing mature technologies, such as asymmetric cryptography, consensus algorithm, time-stamping, etc. As seen from its latest disclosed patent, DCEP is integrated with asymmetric cryptography, unspent transaction output (UTXO), and smart contracts.<\/p>\n<p>The digital yuan adopts a two-layered system for issuance and distribution \u2014 the central bank issues DCEP to banks or other financial institutions, and then these institutions further distribute the digital currency to the public. While the issuance of DCEP is centralized, the circulation could be based on traditional financial account systems or blockchains.<\/p>\n<p>If DCEP transactions happen on a public blockchain, I assume it will probably help the yuan to internationalize. China\u2019s central bank had previously announced that the DCEP pilot scenario included Winter Olympics venues. Foreign entities can simply open a DCEP wallet to conduct the cross-border transaction, as the requirements to open a DCEP wallet are much lower than those to open a yuan deposit account. Peer-to-peer transactions can be initiated between any two DCEP wallets.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Discus_Fish_co-founder_of_F2Pool_and_Cobo\"><\/span>Discus Fish, co-founder of F2Pool and Cobo:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cEssentially, the central bank digital currency is completely different from Bitcoin and other cryptocurrencies because it is still the centralized fiat currency in essence. However, the CBDC may strengthen the public\u2019s perception of blockchain and cryptocurrency. In the long run, under the education of the central bank, the blockchain industry will attract a large number of new users, especially the young people growing up in the mobile Internet environment, thus leading to the rapid development of the industry. It has a long-term positive impact on the industry.<\/p>\n<p>The essence of CBDC is the centralized fiat currency, which is still the central bank\u2019s debt to the public. Therefore, the central bank will adhere to the centralized management mode. This relationship between creditor\u2019s rights and debt will not change with the change of monetary form. Therefore, I think no matter how the form develops, it is impossible for the central bank\u2019s digital currency to be decentralized.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Kevin_Shao_co-founder_of_Bitrise_Capital\"><\/span>Kevin Shao, co-founder of Bitrise Capital:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cThe development of the Internet has brought the popularization of electronic payments, especially the applications of Alipay and WeChat payment, which have changed the habits of many people around using cash. Such changes are profoundly affecting China\u2019s financial development. The central bank is also following the trend of digital economic development, starting from the top-level design of the country, and building a complete set of electronic payment infrastructure.<\/p>\n<p>At present, the central bank has not made a final decision on which technical means will be used for the digital currency. However, we have seen that some cities have experimented with digital currencies. But overall, China\u2019s digital currency still serves the central bank\u2019s monetary policy and monetary functions.\u201d<\/p>\n<p class=\"post-content__disclaimer\"><em>All interviewees were featured in Cointelegraph China\u2019s <\/em><em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/mp.weixin.qq.com\/s\/rm8ob7j-ktYT39XVmb_mFw\">Top 100 Notable People in Blockchain of 2020<\/a>.\u00a0<\/em><em>Cointelegraph China contributed to the interviews.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The quotes have been edited and condensed.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"consulting_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/how-the-digital-yuan-stablecoin-impacts-crypto-in-china-experts-answer\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# How the digital yuan stablecoin impacts crypto in China: Experts answer &#8221; This is part one of a multipart series on blockchain and crypto in China. China has been discussing the possibilities of national digital currency for half a decade, and the Chinese digital yuan project \u2014 referred to as the Digital Currency Electronic&#8230;<\/p>\n","protected":false},"author":1,"featured_media":223794,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDMvOGZjN2JiNGItMjJlYy00ZTZiLWIwODQtOGU4ZjQyMjIzNDRjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,75046,75022,74863,75049,74355,4973,70934,4965],"class_list":["post-223793","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-cbdc","tag-central-bank","tag-cryptocurrencies","tag-peoples-bank-of-china","tag-adoption","tag-china","tag-regulation","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/223793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=223793"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/223793\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/223794"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=223793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=223793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=223793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}