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‘One day everyone will use China’s digital currency’

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Cryptocurrency. It is a digital currency that can be created and used independently of national central banks and governments.

Chandler Guo, a pioneer in cryptocurrency

In 2014, Chandler Guo set up an operation to produce one of those currencies, known as Bitcoin. He published Bitcoin in a secret location in western China.

“Mining” Bitcoin is an enterprise that consumes much electricity as it involves dozen of computers. Therefore, he used power from a hydroelectric station, cooperating with a local Chinese government official. His machines were able to mine 30% of the world’s Bitcoin at its peak.

But now he sees a new field – a payment system created by the Chinese state. It is known as Digital Currency Electronic Payment (DCEP).

Digital Currency Electronic Payment (DCEP)

It is a digital version of China’s official currency, the yuan.

According to Mr Guo, he said that “One day everyone in the world will be using DCEP.” He felt that DCEP will become the dominant global currency. He thinks DCEP will be successful because they are many Chinese living outside of China, around 39million of them. They can use DCEP to have a connection with China and make it an international currency.

DCEP also utilizes blockchain technology, a type of digitalized ledger in verifying transactions like Bitcoin. Blockchain acts as a global record of every transaction made by users on that network. Users then collaborate to verify new transactions occur.

In other word, users don’t need the existence of a bank. For instance, they can just pay each other with their phones.

China plans to launch DCEP later this year. But the exact date for the nationwide launch has not yet been confirmed by the People’s Bank of China.

China began testing the digital currency at the beginning of the year in some selected cities. During the trial, it allowed users to link downloaded electronic wallets to their bank cards, make transactions and transfer money.

China is working hard to accelerate the development of DCEP. An expert said this is because they do not want Libra(Facebook’s digital currency)to become the universal currency. Besides, observers say China wants to launch DCEP to internationalise the yuan so that it can compete with the dollar.

“The Chinese government believes that if some other countries can also use the Chinese currency it can break the United States’ monetary sovereignty.” says an anonymous Chinese cryptocurrency observer.

 

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‘One day everyone will use China’s digital currency’

 

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