Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency discussions => Topic started by: MrSpasybo on October 24, 2020, 10:46:02 PM
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The draft law states that the yuan is the official currency of the People's Republic of China whether in physical or digital form.
The draft law also appears to take aim at third-party efforts at yuan-backed digital currencies, stating that individuals and institutions are prohibited from making and issuing a currency designed to “replace” digital yuan circulation. This move would presumably criminalize all non-state-sanctioned yuan-backed stablecoins.
Article: China's central bank lays regulatory foundation for CBDC (https://cointelegraph.com/news/china-s-central-bank-lays-regulatory-foundation-for-cbdc)
China never fails to disappoint us with its hegemonic and monopolistic ambitions. I don't know if there is any Yuan-backed cryptocurrency in the world, but it seems that this move by the Chinese government goes against one of the most important characteristics of crypto: decentralization and empower everyone.
What if in the future the US government also issues stable coins backed by USD and then prohibits all other stable coins supported by USD such as USDT, USDC, TUSD, PAX ...?
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Looks like this will have a big impact on stablecoin resistance. If the decentralization principle is interfered with by the government.
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In my opinion, the existence of this digital yuan from China will indeed create an economic war. Where this digital yuan takes advantage of crypto technology, but does not adopt the important elements of decentralization. If this provokes the wrath of the US, then the current stable coin will really be under serious threat.
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This is just expected since China wants to gain the full control of its own CBDC and do not want anyone to be interfering that strong control. Now, in my opinion, they can only implement that kind of ruling within their own jurisdiction because it can so hard for them to do it outside. Now, I don't really care if they are banning anyone from using its digital Yuan to be backing any stablecoin because in my opinion stablecoins can soon slowly moving to gold to compensate possible collapse or weakening of the US Dollar. China can have all the control it wants on its digital money because for now this can never affect the future of cryptocurrency in general.
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Such a step by the Chinese government is quite logical and natural. I was expecting something like this. The yuan belongs only to China in any form - physical or digital. It is quite understandable that they want to protect both the ownership of their currency and the possibility of digital abuse by other users.
Stable coins of central banks of states are completely centralized and only use blockchain technology, but they should hardly be classified as a full-fledged cryptocurrency. Therefore, it would be wrong to say that with this law China will violate the principle of decentralization of cryptocurrency.
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The Chinese government is taking timely and appropriate steps to protect its digital yuan. Imagine a situation where an individual or a specific organization has created their own stablecoin backed by a digital or physical yuan. Thereafter, due to some kind of abuse, this stablecoin disappears and everyone who purchased this stablecoin has suffered losses. Even if no one can directly make any claims to the Chinese government, the image of the yuan will suffer in any case. Therefore, this bill is intended to prevent such undesirable consequences.
It is likely that other states will take similar measures over time.
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The Chinese government is gradually working her way to making life much more easier for her citizens. The new currency will surely cause a seriously turbulence competing with the USD $.
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This regulatory approach is quite expected and understandable. This is obviously to ensure no abuse of yuan. It may not sound decentralized but I think it's necessary to protect it's value. Weird thing is what if USA create their Digital dollar and trash out all digital currencies backed by USD, that will be fucked up
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This regulatory approach is quite expected and understandable. This is obviously to ensure no abuse of yuan. It may not sound decentralized but I think it's necessary to protect it's value. Weird thing is what if USA create their Digital dollar and trash out all digital currencies backed by USD, that will be fucked up
Well, that could very well happen. So far, states have not paid much attention to the fact that someone is using their national currency to provide their stable coins. These states have the right to prohibit doing this, because the currency belongs to them and only they have the right to dispose of it at their discretion.
However, then all private and commercial stablecoins, including tether, will be outlawed.