CryptoYuan is coming!
The People’s Bank of China (NBC), together with several commercial banks in the country, began to carry out “transactions on paper” to test a prototype of the national cryptocurrency (CryptoYuan), designed to increase the volume of electronic payments.
Based on the People’s Bank leaders statements, the digital currency (CryptoYuan) will be introduced in parallel with other projects, but there is no exact date yet (however, some rumors was pointed to the 2018).
Nevertheless, the tests already testify to the seriousness of China’s intentions to explore technical, logistical and economic obstacles to the introduction of digital money, which will undoubtedly have a great impact on the country’s economy and on the world financial system, as the yuan (CryptoYuan in a future) is rapidly becoming one of the reserve currencies
Digital money – issued by the central bank and possessing the same legal status as cash – will lower the cost of transactions and will help, thereby, expand the spread of financial services. This is especially important for China, in which millions of citizens do not have access to traditional banks. The digital currency will become cheaper in servicing and will reduce fraud and counterfeiting of banknotes.
More importantly, the crypto currency issued by the People’s Bank will give the Chinese government a greater degree of control over foreign exchange operations, and this will help to reduce corruption, which is a priority in the China. And, finally, the Crypto currency will help increase the number of international transactions.
One of the main constraints for the People’s Bank is the fear that digital money will undermine the commercial banking system, allowing everyone to establish an account with the central bank. In order to prevent this, the digital currency (CryptoYuan) will be integrated into the existing banking system, and commercial banks will have the opportunity to manage people`s digital wallets.
According to Yao Qian, deputy director of the technological department of the National Bank of China, China’s national crypto currency will have its own specifics and significantly differ, for example, from bitcoin. The digital yuan (CryptoYuan) will be only partially based on the technology of the distributed registry – all transactions in the block system will not be reflected. Including technical reasons: experts believe that the blocking company simply cannot cope with the volume of transactions that the Chinese financial market generates. But periodically the blockage will be used in China to confirm the rights of owning money in the national crypto currency.
According to Bloomberg, the digital tokens on the block, released this year, have increased in value by an average of two times since the first release. According to experts, this is a sign that the market of crypto-currency is gradually becoming an economic mainstream.