- The long-awaited Chinese e-Yuan has been launched
- There are concerns that it could end Bitcoin’s dominance
- The e-Yuan will be strictly regulated by the state
Cryptocurrency News Today –the long-awaited state-backed digital currency from China, the Chinese e-Yuan has been launched. Investors have begun to gear up to join the bandwagon. Central bank-backed digital currencies have been gaining momentum recently. About 70% of the world are looking to create their state-backed cryptocurrency. China is now leading the race after launching its token.
President Xi Jinping of China has called Blockchain development a crucial step towards implementing next-generation industrial and technological innovation. The launch of the Chinese e-Yuan shows China’s intent to fulfill this ambition. The Asian state is expecting investors from around the globe to adopt the concept of digital currencies. At press time the authorities haven’t given details about how the crypto will be integrated.
Is the Chinese e-Yuan the Elixir the World Needs?
China’s growing debt is beginning to pose a hindrance to the country’s growth. At press time, the bad loan issue of China was at $341 billion (which was primarily triggered by local collateral-related issues). Of course this is not a healthy debt level but a bad debt that results in an international rating downgrade for what has since been one of the world’s biggest economies in recent decades. The Chinese e-Yuan will probably help to solve the country’s mounting debt problem.
Smart contracts will give the Chinese authorities the ability to track assets and remove their bad debt that has been triggered by multiple collaterals. These liabilities can now be tracked more effectively with the new technology. Initially, the state-backed crypto will be strictly regulated by the state. It will only be verified entities that will be given permissions to conduct transactions. This means that true decentralization may be a doubt for the Chinese e-Yuan.
Bitcoin isn’t Necessarily in the Red Zone, At least Not Yet
There have been concerns that the launch of China’s state-backed coin sees the end of BTC. For now details are scarce and we do not know whether physical assets will back the crypto. Recently, china bought a huge amount of gold. The purpose of this was to support its fiat. The Chinese authorities would back the digital currency with physical assets if there is any significant decline in the value of the new currency. Interestingly, China’s technology stocks have risen since the e-Yuan announcement.
Foreigners have spent $26.99 billion purchasing technology from companies listed on the Shenzen stock exchange. Even though the e-Yuan is state-backed and not decentralized, it can fiercely compete with Bitcoin in the future. However, it remains unclear whether the Chinese e-Yuan will reach the heights attained by BTC or not.