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China Turning the National Currency into Cryptocurrency

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Donald Tapscott, executive chairman of the Blockchain Research Institute, recently stated that the official Chinese currency, the renminbi (RMB), will be becoming a cryptocurrency. He stated this in an interview with Bloomberg on April 17.

In the interview with the Bloomberg Tapscott revealed about his recent meeting with the vice-chairman of the Communist Party in China. He recalled President Xi Jinping’s thoughts about blockchain being the most important technologies for the future of the country.

In addition to the crypto ban in the country, Tapscott revealed that China is thinking about banning cryptocurrency mining as well. Speaking about this he said, “It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”

About the operation of decentralized exchanges in China, he said they could allow although the government has a very serious stance towards curtailing digital currencies. Previously the government has banned Initial Coin Offerings.

Tapscott also suggested that soon the decentralized currency will be dominating centralized currency because of the ability to transparency and identify “Bad behavior”. All assets, All assets, including traditional ones like securities, will purportedly be on decentralized exchanges, Tapscott added.

Chinese authorities have long been discussing the possible ban of cryptocurrency mining. The National Development and Reform Commission (NDRC) has reportedly included crypto mining as part of its draft for a revised list of industrial activities the agency intends to shut down because they “lacked safe production conditions, seriously wasted resources, polluted the environment,” among other issues.

China is a major player in the bitcoin market. Its largest bitcoin mining pools are controlled by local organizations. By mid-2018 the crypto mining operator Bitmain operated almost 11 mining farms in China. Hence Bitmain is to suffer most and would be largely affected by the NDRC’s plans.

Speaking about blockchains, China is leading in the world in the number of blockchain projects currently underway in the country. Looking into the statistics, there are 263 projects in China that are blockchain based. These count for 25 percent of the global total.

Last month a project was unveiled in Jiangsu Province called as the “Implementation Plan for the Promotion of Transportation Infrastructure Development”. According to this project, the local authorities of China will be deploying blockchain in overhauling local transport infrastructure.

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