Blockchain author sees China’s Renminbi as a digital currency in future


Despite China’s anathema for all things crypto, Donald Tapscott, chairman of the Blockchain Research Institute and noted author on blockchain matters, believes that, over time, Chinese officials will get over their fears and embrace cryptocurrencies. In an interview with Bloomberg, he noted:

In 20 years, we’re not going to be using bitcoin in China. The Chinese people will use the RMB, only the RMB will become a cryptocurrency. The Central Bank of China will turn it into a digital currency.

China has never had a love affair with cryptocurrencies, far from it. The latest news is that they now plan to clamp down hard on crypto miners. Per a recent article from Fortune magazine:

The prospective ban does not come as a surprise. China has been unfriendly to cryptocurrencies – the permission-less, public blockchain variety – for a while. It banned so-called initial coin offerings, or ICOs, in 2017. It cracked down on cryptocurrency exchanges that same year. Targeting mining was the nation’s next logical step.

There is also a blanket ban on all Bitcoin and cryptocurrency trading, as well, but Chinese investors have learned to work through Over-the-Counter (OTC) markets to circumvent local restrictions. Insiders foresee Chinese officials getting tougher still by instituting stiff new regulations, since controlling a ban is fraught with problems, when easily accessed alternatives exist. While the intent may be to snuff out cryptos, Tapscott says that the same officials do welcome blockchain technology.

In a recent trip to the Middle Kingdom, Tapscott had an opportunity to sit down with those in the know and learn that President Xi Jinping feels that, “Blockchain is one of the two most important technologies for the future of China.” It is quite obvious that the world’s largest industrial complex has to be forward thinking and planning ahead for the next innovative waves, which have typically been ascribed to be blockchain and Artificial Intelligence applications, especially in the field of robotics.

Nevertheless, China is no different than its neighbor, India, in its attempts to separate cryptocurrencies from blockchain technology, as are several other countries in the competitive race to attract new technologies, along with the jobs and economic growth that come with it, to their respective shores. Governments that depend a great deal on central planning, however, have great difficulty in accepting decentralized digital currencies. China is in this category, and as Tapscott notes:

The government is quite serious about hurting crypto.

But time may be on the side of cryptos. In a recent report released by the World Economic Forum, it found that central banks the world over are engaged, to a much higher degree than anticipated, in blockchain pilots:

Despite central banks historically being risk-averse, a number of different nations have contributed numerous white papers, reports, and investigations into how blockchain technology could improve their operations… Over the next four years, we should expect to see many central banks decide they will use blockchain and distributed ledger technologies to improve their processes and economic welfare.

China may soon decide that it is time to board the blockchain train before it gets too much further down the tracks. The revolution brought about by smartphone technology, combined with the benefits of blockchain distributed ledger systems, may cause Chinese officials to conclude that a central bank digital currency, i.e., one controlled and operated by the central bank, may provide an enormous boost to the local consumer economy, one that they want to supplant the manufacturing model that has existed for decades.

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