Cryptocurrency has evolved over the years and many different cryptocurrencies have emerged, in fact, as of January 2021, there are 4,000 cryptocurrencies in existence. The one thing all of these have in common is not only that they’re cryptocurrencies, but that they’re not government owned. However, this has just changed, as China has announced that they are officially adopting a certain cryptocurrency called Yuan Pay.
This information may be disputed as the report comes from the government. In a more balanced view, other sources have reported that Yuan Pay may be part of the Chinese government’s pilot program for an official digital version currency, something they aim to test at the Beijing Winter Olympics in 2022.
Some critics have pointed out that crypto could boost the government’s power over the country’s financial system and embolden authoritarianism. But this grand plan may not be so easy for China, because, on top of current cryptocurrencies such as Bitcoin and Ethereum, China’s own mega-cap companies have currencies. For example, China’s government would potentially have to compete with two of China’s most successful tech giants, Alibaba and Tencent, each of which backs Alipay and WeChat, respectively. Some have even drawn connections from this to Alibaba CEO Jack Ma, and his disappearance last month. All in all, this seems like it may take longer than China is claiming, but when it does roll out things will likely move smoothly with More than 80% of smartphone users in China regularly pay for transactions on their devices, the highest rate in the world, according to UBS Group AG.
Do you think China should get involved in crypto? And will this affect current crypto markets?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.