Longtime crypto adversary President Xi hails blockchain a ‘breakthrough technology’ as China’s central bank is now preparing to launch its state-backed cryptocurrency at the beginning of next year.
The announcement of Xi’s u-turn on digital currency saw an immediate rise in the value of Bitcoin, at the time of writing $9,337, and appears to have added some enthusiasm within the industry by adding a certain degree of legitimacy to the cryptocurrency.
With other leaders like France’s President Emmanuel Macron and German chancellor Angela Merkel displaying more of a hesitant attitude towards Bitcoin and its technology, China’s turnaround could be seen as further proof that digital currencies will be the future.
CEO of financial advisory firm deVere Group told The Independent:
“This is a clear signal that the leader of the world’s second-largest economy is moving towards embracing the technology- in which Bitcoin plays a vital part – and therefore taken as a positive boost for the whole digital currencies sector.”
In a race to beat Facebook’s Libra launch, China’s digital currency will be called DCEP (digital currency electronic payment) and is envisioned to be pegged to the country’s own credit, gold reserve, fiscal income and gross domestic product, according to Coindesk.
The People’s Bank of China has been studying the DCEP for five or six years according to a Tweet from the China Finance 40 Forum and “is likely to be the first central bank in the world to launch a digital currency,” said vice president of China Center for International Economic Exchanges Huang Qifan at the Bund Summit this week.
Xi’s change of heart also comes in a bid to beat other private companies that are looking into launching stablecoins just as the EU, Japan and Russia are reportedly trying to build a cryptocurrency payment networks.
The race to launch digital money is in full swing and one can only expect to witness more u-turns and change of hearts as world leaders succumb to the potential of cryptocurrency and its technology.
By Leonie Zeumer