China’s policy played a huge role in the price of Bitcoin in 2017. China announced in September 2017 the end of cryptocurrency exchanges in the country. This limited people from trading within the country and had no option but to search for alternatives offshore.
Despite this move to ban digital currency exchanges during the latter part of 2017, in a forecast, there is a chance that China is going to surprise the crypto world, yet again. But this time around, there is a possibility that China is actually planning to make its own cryptocurrency.
People’s Bank of China president Zhou Xiaochun mentioned in an interview that China has been looking closely at the possibility of adopting central bank digital currency (CBDC). On December 27, blockchain was included in the “13th Five-Year Plan for National Informatization”. This only means that the government does see the value of blockchain technology in different industries.
During January 2017, China’s central bank has tested the digital notes exchange platform. In a paper that was published in Tsinghua Financial Review, digital currency was utilized in order to exchange notes between commercial banks. Among the commercial banks that have participated include Industrial and Commercial Bank of China, Bank of China, and WeBank to name a few.
By July of 2017, Central Bank Digital Currency Research Institution had its autonomy after it separated from the People’s Bank of China.
Benefits of Blockchain to China
Transactions using digital currency can be considered more efficient and convenient. It has the ability to eliminate third parties that can add fees and even increase chances of errors along the way.
Experts believe that China is first going to launch the Chinese Central Bank Digital Currency as a pilot program in order to evaluate risks and to manage public expectations. It seems likely that Central Bank Digital Currency will first be available to banks and even for bank-to-bank transactions. This could mean that the existing foreign exchange, as well as capital controls, can still be imposed without the drastic changes along the way.
There is also a possibility of adopting blockchain technology in both retail and logistics. VeChain has launched its first commercial blockchain platform. Using this blockchain technology, customers can utilize their mobile phones in order to scan the IoT tags attached to the wine bottles in order to know more about its information through blockchain.
China Isn’t Alone
China isn’t the only country that has shown interest in blockchain technology. Venezuela recently announced that it is going to launch its very own cryptocurrency. The purpose of its oil-backed cryptocurrency is to protect the country’s economy against economic sabotage.
Though it is true that there are many countries today that are looking to regulate cryptocurrencies and ICOs, there is still a silver lining to all of this. It is undeniable how other countries are now seeing the potential benefits of blockchain technology in day-to-day transactions.
Could we actually be seeing blockchain technology being applied by China soon? Is it possible for more industries to see a practical use for this relatively new technology? Given what we see today, 2018 could be the year that we see more companies and countries adopt blockchain technology.