The influence of Asian countries on Bitcoin and other virtual assets has been widely recognized this year. The geopolitical unrest between the United States and China during the ongoing trade war has precipitated an increase in Bitcoin interest across the world.
It was also recently reported that a new weekly high for Bitcoin volume was triggered due to growing retail trading in places like Seoul and Tokyo, where high trade premiums are charged.
Among all Asian nations, China has kept its cards very close to its chest. This begs the question, where does China stand in between all the cryptocurrency and blockchain commotion?
If we make a list of all the countries that can rival the U.S.A’s political and economic dominance, China would be considered the undisputed favorite. The Asian country is currently best positioned to develop a blockchain-based virtual asset that could favorably compete with the existing fiat currency system in the US. China has a major stronghold on global trade too. However, according to reports, the Chinese fiat currency’s illiquidity makes it a less than desirable replacement for the U.S dollar.
China enjoys a major advantage, with a majority of the population already accustomed to cashless transactions through Alipay and WeChat. The country is perfectly placed to integrate cryptocurrency into their system. However, the digital currency being developed in China might not follow the same guidelines set by other major virtual assets like Bitcoin.
Virtual assets like Bitcoin and Litecoin are based on the principle of decentralization; an asset without the control of a single authority. The People’s Bank of China [PBOC] aims to develop a crypto-asset that would be completely administered by the government. It has also been reported that the central bank wants to ensure that the said virtual asset act as a capital control in monetary policies.
The difference between Bitcoin and the virtual asset being developed by China is significant. The central bank’s Vice Governor stated in 2016 that their objective was to reduce operating costs, improve efficiency and increase payment applications with their digital asset. No argument about it acting as a “store of value” or global monetary transparency has ever been cited.
China will continue to be a force in the global financial landscape; with or without regulated crypto-assets. However, it has been reported that Beijing is planning to introduce its digital asset and its blockchain infrastructure into its financial sector soon.