China to Make Yuan Versatile than Launching a New CryptocurrencyAugust 16, 2019
While there is a widespread rumor about china is coming up with a cryptocurrency, several analysts think that it is not likely to be a cryptocurrency.
Zhou Xiaochuan, PBOC In response to Libra stated, “Make good preparations and make the Chinese Yuan a stronger currency.”
The largest banks in China are state-owned. In practice, PBOC might be controlled by the state and heavily influenced by it. And, if there will be a cryptocurrency, it is likely to be a centralized affair. The members of the public will not be able to be a part of either the governance or the mining process.
The Chinese Central Bank will need to have the majority of its decisions approved by the significant bodies in the Chinese Communist Party. Therefore, even if the Chinese Central Bank would operate with some liberalization, it will likely lockstep with the political goals of the CCP. The CCP still appoints the bank directors, and the PBOC should listen to the State Council, eventually the Xi Jinping.
Since the PBOC will design all wallets, it will have access to all kinds of data relating to the transactions. It is not yet clear as to whether private partners will be able to get involved in terms of analyzing the data or in the process of assembling the wallets.
PBOC has filed for several patents, and these patents indicate that the PBOC might want to have end-to-end control of the process. Therefore, chances are unlikely for public records which are similar to the blockchain, and there might not be too many services providing permission to access the generated data. Therefore, it is unlikely for a blockchain component in all-new digital currency.
Mu Changchun, Deputy Director of PBOC payments department, stated, “Blockchain platform just couldn’t deliver the throughput needed for retail.”
Considering the public display of data, it is very likely that the PBOC might use a similar governance structure which it might apply in coordination with the commercial banks to release the CNY into circulation. Ultimately the issuance might not be controlled by decentralized proof-of-stake or the proof-of-work, but it will be governed by methods, which have existed for fiat currencies.
Because the PBOC is accountable to the state in the ultimate process, every kind of data related to cryptocurrency transactions might likely be stored for state purposes.
It seems like the Chinese government is looking to make the Chinese Yuan more versatile than launching a unique and new cryptocurrency.