The long-awaited Bitcoin competitors of the central bank are "almost" coming.

Ten years ago, the issuance of Bitcoin was a relatively influential event, but it has already had a huge impact. Some of the world's largest companies and countries are involved in the field of cryptocurrency. Bitcoin and other cryptocurrencies have been rebounding strongly so far this year, mainly because some of the world's largest technology companies are interested in encryption, including social media giant Facebook, iPhone maker Apple and microblogging platform Twitter: since this year 6 Since the release of the Libra white paper by Facebook in the middle of the month, the Libra project has been receiving industry attention.

In early June, Apple announced that it will launch the Crypto SDK software development kit on iOS 13, providing developers with the infrastructure to "encrypt and operate cryptographically and efficiently."

Twitter CEO Jack Dorsey is also taking steps to integrate bitcoin and cryptocurrencies into its payment business Square.

The price of Bitcoin has soared in the past 10 years, and has fallen sharply after reaching an all-time high of nearly $20,000 at the end of 2017, but this has attracted the attention of many banks, retailers and technology companies in the large bitcoin bull market. Only then fell back .

Now, the Chinese central bank said that it is “almost ready” to issue its own sovereign digital currency, which may give billions of people in China the idea of ​​using bitcoin, cryptocurrency and digital currency. Yi Gang, president of the People's Bank of China, said the bank is preparing to launch its own digital currency, which can compete with Bitcoin and Facebook's Libra currency. Source | Bloomberg

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The central bank's digital currency, which the People's Bank of China plans to launch, has already been “out of the box”. The deputy director of the central bank's payment and settlement division, Mu Changchun, said in the “China Finance 40 People's Yichun Forum” on August 10, although he did not give it. A clear release date.

However, Mu Changchun also said that China's digital currency will not rely entirely on blockchain technology like Bitcoin and other cryptocurrencies, because it is worried that blockchain technology cannot handle China's huge trading volume .

In the past five years, the People's Bank of China has been considering the creation of digital currencies, and other major central banks, including the Riksbank, are also seriously considering issuing a digital currency to begin to replace physical currency . Public information shows that China's central bank has set up a statutory digital currency research group as early as 2014 to demonstrate the feasibility of the central bank issuing legal digital currency. At the beginning of 2017, the Central Bank Digital Currency Research Institute was officially listed, and its research interests include digital currency and financial technology. According to relevant statistics, as of August 4, 2019, the Central Bank Digital Money Research Institute applied for a total of 74 patents involving digital currency. It is understood that the Chinese central bank's digital currency adopts a two-tier operating system, that is, the central bank first converts digital currency to banks or other operating agencies, and then these institutions are redeemed to the public . In order to ensure that the central bank's digital currency is not over-received, banks or commercial institutions need to pay 100% of the reserve to the central bank in full.

In other words, the digital currency that the central bank intends to issue is actually a digital legal currency that can be used to replace the physical currency and has “controllable anonymity” .

Mu Changchun said:

"The adoption of a two-tier system for the exchange of the central bank's legal digital currency will help curb public demand for cryptographic assets and consolidate our national currency sovereignty ."

Last month, the People’s Bank of China, the world’s fourth-largest bank, posted a bitcoin’s infographic on its website explaining the history of Bitcoin and how cryptocurrencies work, which was identified in a court in China by Bitcoin. The actions taken by the Chinese central bank shortly after the legal digital property.

With the interest in Bitcoin and cryptocurrencies circulating in some of the world's largest technology companies, bitcoin prices have soared strongly in 2019 . As mentioned above, social media giant Facebook, microblogging platform Twitter and iPhone maker Apple are researching/exploring encryption and bitcoin. Facebook plans to launch its own digital currency Libra sometime next year, provided that it Can be supported by global financial regulators.

The People's Bank of China has launched its own cryptocurrency, which may push the price of bitcoin and cryptocurrency like Facebook's Libra plan. At the same time, it is reported that US retail giant Walmart is also seeking to develop its own cryptocurrency. Some speculate that the once-biggest retailer in the world may be looking to compete with Facebook's troubled Libra project – many believe it is the reason behind Bitcoin's so far year-on-year gains .

Bitcoin prices climbed rapidly at the end of 2017 and then fell to $4,000, but have since rebounded. Source | Dave Chapman, Executive Director of CoinDesk BC Technology Group, said:

“There is no doubt that after Facebook’s Libra announcement, governments, regulators and central banks around the world have had to speed up their plans to develop digital currencies, such as Libra and Wal-Mart’s digital currency, which could bring significant benefits to the financial and payment sectors. The impact of the Chinese central bank has previously stated that Libra and similar private digital currencies will be regulated by it, which may limit their business in China.

So far, China's relationship with Bitcoin and cryptocurrency has been less friendly. Beijing has cracked down on cryptocurrency transactions by closing the Bitcoin trading platform and prohibiting the first token issue (ICO), which ICO is raising in 2017. A way of funding. The digital currency of the central bank’s “calling out” will also serve as a tool to “suppress public demand for cryptographic assets and consolidate our national currency sovereignty”. However, bitcoin and other cryptocurrency mining are still very popular in China, and China has more than half of the world's bitcoin mines. As mentioned above, some people believe that the introduction of the central bank's digital currency may be expected to raise awareness and adoption of “unofficially issued cryptocurrencies” such as bitcoin and cryptocurrency, which will promote the market trend because The field of cryptocurrency is similar to the traditional investment field, and is affected to some extent by the “emotion” of investors .

Although this is inconsistent with the original intention of the central bank to introduce digital currency. Are you looking forward to the central bank's digital currency? Welcome to express your opinion in the comment area!

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