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China is finally ready to roll out its official virtual currency which is believed to be some middle ground answer to the state’s anti-crypto crusade. Having been on the anti-crypto end for a while now, it might come as a shock to hear that the Chinese government is actually for crypto after all – just not the conventional crypto coins.
The China Crypto project started some years back, just when the crypto craze was at its peak. Cryptocurrency had just started gaining wide recognition and so were the illegal activities it is said to enable.
During the 2017 crypto hay days, a ton of crypto firms sprouted out of virtually every corner of the earth and the virtual world. People were rushing into the crypto world, whilst crypto exchanges and other crypto-related firms were on the rise to meet the demand.
Unsurprisingly, stats show that a good number of the crypto ventures and initial coin offerings (ICOs) were fake and headed by con artists. Not so long into the cryptocurrency craze, news of connected illegal activities started coming up. The bad eggs were just too many, that they drowned the good ones.
Some countries, in a bid to protect their investors, took drastic measures to help reduce the crypto mania. While others turned to creating a fiercer regulatory framework, China resolved to an outright ban of ICOs and crypto activities. This action pushed crypto exchanges out of the country and forced other users to lie low. However, news started making round of Chinese cryptocurrency exchanges maintaining operations but under foreign names. Maybe that wasn’t the right solution after all.
Nonetheless, the Chinese government made it known that they do acknowledge the potential blockchain technology holds and are even considering creating a crypto coin of their own, and then it even became a top priority.
Fast forward to the last week, the payment deputy chief of the People’s Bank of China, Mu Changchun, announced that China’s official cryptocurrency may hit the blocks very soon.
Prior to the launch, Changchun explained that China’s virtual currency will be somewhat different from other popular virtual coins. The virtual asset is expected to be a lot more complex than our everyday cryptocurrency. Also, it doesn’t rely only on blockchain, like other digital coins. Instead, it relies on a two-tier split which has the People’s Bank of China at the top and commercial banks at the bottom. “It just couldn’t deliver the throughput needed for retail,” he said.
Besides taking away all the drawbacks of crypto coins, the new official virtual currency is also expected to create more economic stability in the country.