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It’s been no secret that China is working on a national cryptocurrency. However, with their new laws regulating cryptography out this week, it seems they’re gearing up to release it sooner rather than later. Back in 2014, China’s central bank looked into the possibility of launching its own form of cryptocurrency.
The idea was to cut the costs of both printing and circulating the more mundane type of paper money. As an added benefit, it’d tighten policymakers’ control over its own money supply. Whether or not they planned to release it so soon is up for debate. They started to plan for it five years ago, which is a lot of time to build your own blockchain.
Either way, the recent rise in global cryptocurrencies, as well as Facebook’s stablecoin Libra, will no doubt have affected their schedule in some way. The Xinhua News Agency, China’s official news network has reported that the Chinese parliament has recently passed a new law. This cryptography law takes effect at the start of the new year. The official reason for this was to ensure the cryptography industry’s development while maintaining security on both information and cyberspace.
Libra, Facebook’s up and coming stablecoin backed by real-world assets, has upset the world about the implications of such currency. Libra wouldn’t be controlled by a nation, but a private company. It runs the risk that the world will shift over to Libra, costing world governments billions and irreversibly changing the geopolitical landscape.
The US and EU regulators have actively tried to curb Libra’s advance due to this fear. While the Libra Foundation, Libra’s governing body has taken a hit by way of major corporations leaving them, they’re still on their way to launch. China has already blocked Facebook’s social media platform from operating within their borders. However, Libra has brought to light China’s lack of progress in this sector. More often than not, they’ve banned what they can’t control.
However, they run the risk of falling behind if they don’t take decisive action, and this decisive action seems to be pushing their RMB token.
Decentralized Then, Centralized Now
There is a genuine sense of irony about China creating its own form of cryptocurrency. Satoshi Nakamoto, the enigmatic creator of Bitcoin, took great steps to ensure that the cryptocurrency was as decentralized as possible. The network’s entire philosophical standpoint is the rejection of centralized control. China aims to albeit unintentionally, spit into Satoshi’s face with their own form of cryptocurrency.
China will use its digital token to control its people further. They will be able to see where their money is going, for what its used, and who sent what where. Leaving the morality of something like this well alone, one has to wonder what Satoshi, whoever Satoshi is, must think of Libra and the digital RMB.