In order to take on the popularity and influence of Bitcoins, China’s Central Bank is planning to come up with China’s own digital currency. They have been studying this space since 2014 to decide on the implementation.
China hasone of the largest Bitcoin Exchanges – BTCChina – and bitcoins have been big in China for last some years. The major reason for this interest by China’s Central bank is because of the exodus of currency from China in the last couple of years.
Roughly $676 billion is estimated to have left the country last year, with about one-third of that fleeing via back-door channels to circumvent the country’s strict capital controls, according to the Institute of International Finance.
Many investors have been moving money out of China as the value of the yuan has fallen amid an economic slowdown and financial market turmoil.
Bitcoins are powered by a computer program called blockchain which processes transactions automatically and have a reliable record. If Chinese Government is able to get this going it can help their economy in a big way.
Issuing digital money could help “reduce the high costs of circulating traditional currencies … boost the convenience and transparency of transactions, reduce money laundering, tax evasion and other criminal acts,” according to the statement, which summarized the findings of a special meeting on the subject in Beijing this week.
The next currency wars in future may be in the digital arena!