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- China’s authorised cryptocurrency, e-Yuan, has gained attention from all across the world
- There is still underlying unpredictability about whether the value of e-Yuan that will be incorporated in China’s financial system
- e-Yuan is expected to solve the particular problem of Chinese bad debt
The popularity of cryptocurrencies is on a consistent rise nowadays. It has resulted in various nations examining ways to establish China’s autonomous E-yuan.
China’s announcement of e-Yuan
The biggest economy to register its involvement in the surging quest of cryptocurrency is: China. As per the reports of Xinhua, the government-aided news agency of China, President Xi Jinping recently stated the significance of Blockchain. He quoted the importance of the upcoming stage of industrial modifications and technological innovation in China.
China’s authorised cryptocurrency is known as the e-Yuan. Its advancement has gained attention from all across the world. Investors are more than ready to get a share of the new currency. The underlying hope is that this will also translate into the levels of popularity that Bitcoin has accomplished.
However, there is still crucial unpredictability regarding the status of the new cryptocurrency. The fix is about the value of e-Yuan that will be incorporated into China’s financial system.
Critics of the crypto argue that a currency that is primarily state-controlled will never become autonomous from the government. Thus, it will never be decentralized.
A solution to Chinese bad debt
e-Yuan is expected to solve the particular problem of Chinese bad debt. The country currently holds ￥2.4 trillion of bad debt. This respective value has aggregated from the corrupt practice of promising multiple loans with the same capital.
J. Rothers, the senior blockchain researcher, suggests that the e-Yuan will prove to be an appropriate solution for the Chinese government. It will allow the government to trace assets as well as liabilities. This will further refute the use of single collateral in delivering multiple loans.
The Chinese state will regulate the circulation of cryptocurrency. The selling facility of the e-Yuan will be provided only to the banks and official brokers. As of now, it is uncertain whether any physical asset will be employed to back up the currency.
Post the announcement of e-Yuan, international investors have splurged more than $26.99 Billion on Chinese tech stocks. Shenzhen stock exchange has thus accomplished record heights. All of this translated as a piece of very happy news for the investors of the Chinese technology stock.
Ever since the stock market has crashed due to the pandemic, investors are on a constant lookout for stocks with valuable potential. The majority of them tend to believe in e-Yuan as a unique financial opportunity.
Thus, even if e-Yuan fails to provide a solution to the country’s long-pending bad debts, it will ensure the ascending of middle-class investors on the financial ladder. It will be interesting to see if e-Yuan will be able to match up to the potential of Bitcoin.
