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- CBDC of China can help the nation actively to gain global supremacy
- Chinese government’s stance regarding cryptocurrency has raised geopolitical tensions and commodity prices
- The country does not considers Bitcoin or any other cryptocurrency as a legal tender
- Chinese government seems wary of virtual currencies but has embraced the blockchain technology
CBDC or the central bank’s digital currency is being studied by almost all the central banks globally. China is one of the leading countries that has embraced blockchain technology and introduced its nation’s digital currency. Although the country embraced the technology behind Bitcoin, the cryptocurrency is still In mid infancy. In mid-May, the cryptosphere witnessed a major crash in the crypto market. One of the bigger reasons behind the crash is the latest crackdown by China. Such a move came at a time when there was widespread instability due to the global COVID-19 pandemic.
China’s stance rose geopolitical tensions
The measure of tightening the cryptocurrency activity after introducing its CBDC had sparked a sell-off spree of digital currencies. The measures in turn have resulted in the rise of geopolitical tensions and commodity prices. The measures came when the market for several digital assets was on a bullish run.
It is witnessed that digital currencies have outperformed and shown boundless growth. Such trends indicate the formation of a bubble that makes the commodity market volatile.
However, it was not the first time that the nation tried to dominate its local digital assets market. Indeed, we have noted some gradual evolution of the country’s relation with crypto for the past few years.
China’s CBDC is only a legal tender
Following the stance of the nation, we have observed that China does not see cryptocurrencies as legal tender. Hence the flagship cryptocurrency is neither accepted by any firm nor by the traditional banking system. Notably, the Chinese government defined Bitcoin as a virtual commodity.
China seems wary of cryptocurrencies
Observing various prohibition methods of China’s financial regulators it seems the government is wary of such assets. Still, following the country embracing blockchain technology, it seems the aforementioned factor is not true.
In the current scenario, the government is looking at the issuance of its CBDC. And is actively working its way towards attaining global supremacy in the digital field. Hence now the successful measures of the nation would reduce the ability of the United States sanctions and blockades.
