2020 has highly-anticipated events like the Bitcoin halving, launch of a state-backed cryptocurrency, Proof-of-Keys event, Ethereum’s Muir Glacier and Berlin, among many. Facebook’s Libra project was supposed to take-off in 2020, but looking at the regulatory whirlpool, Libra is in, the launch may have been pushed for later. However, the introduction of Libra alarmed countries around the world and the race of the first state-backed crypto began, with China taking the leading.
Despite its Yuan-backed crypto project, China has been opposing cryptocurrencies, mainly on the grounds of the economic risk they pose. According to a notice dated 21 November, China’s central bank, People’s Bank of China [PBoC] began cracking down on crypto businesses and warned it was taking actions against entities trading in crypto like Bitcoin.
However, can crypto, like bitcoin, actually pose a threat to the economic sovereignty of a nation? In an exclusive interview with AMBCrypto, LocalBitcoins noted that Bitcoin’s potential for expansion rather added to its vision of being a viable borderless currency
“Bitcoin and crypto in general are not yet being used in the same manner as government issued currencies and we believe that it is more useful to think they are working as cooperative rather than parallel or competing economic ecosystems. Bitcoin has a lot of potential for expansion and we can already see that its practical use cases are progressively gaining more importance, which contributes to building Bitcoin’s case as a viable borderless currency .”
However, as the day of CBDC launch approaches, China has been striking down the use of crypto. According to a report, China’s securities regulators urged Beijing authorities to carry out preventive actions to discourage the use of cryptocurrencies by the people of the country. On 27 December, China Securities Regulatory Commission (CSRC) explained the risks of the resurgence of the digital currencies like trading, digital currency mortgage provisions, and others on its website and noted that it was a serious violation of its central bank.