The PBOC, “The People’s Bank of China” says it is close to launching its own cryptocurrency, according to senior employees. This can have major consequences for the crypto currency world, as we have already seen with Facebook’s Libra. What exactly does this Chinese crypto currency mean?

The People’s Bank of China & Bitcoin

The Chinese bank has been developing the project for around five years. However, since the release of the Libra from Facebook, and much is said worldwide about the possible negative impact that this type of currency can have. Central banks around the world, for example, agree that digital assets must in any case be supervised by central banks to prevent risks. This is of course true in China, where the government always wants to have a say. With the arrival of the PBOC currency, this seems to be a success.

The whole idea of ​​a blockchain project is that it gives users more freedom and makes them less dependent on a central entity. It seems that the currency of the PBOC is different. If we have to believe the patents applied for, consumers and companies can download a mobile application and exchange their currency (yuan) for the digital money. This can then be used just like Bitcoin, but it is possible for the PBOC to track every transaction with their blockchain. However, there are personal details associated with the bank, so that every time you use your money, it can be linked to you. A bit the opposite of how the blockchain is intended.

What does this mean for Bitcoin?

As mentioned earlier, the Chinese currency is not directly a competitor to Bitcoin when we look at important issues such as anonymity. But the impact of the Chinese crypto currency can indeed be felt by Bitcoin. There are around 1.4 billion people in China, half of whom have a smartphone. This is a large group of people who could potentially use Bitcoin. Due to the increasingly strict regulations of China, the threshold to start with Bitcoin is relatively high compared to us. With the arrival of his own crypto currency, there is a chance that this group of people will no longer come into contact with Bitcoin. After all, it is difficult to use in your own country because of the regulations and there is also an “alternative” in the form of the PBOC crypto currency.

Not just negative

On the other hand, it can also have very positive consequences for Bitcoin, just as Libra’s announcement proved good for the Bitcoin course. Many people see the announcement of this type of project as an approval of the underlying technologies of Bitcoin. It is a good sign that large multinationals and even governments want to use these technologies for their own projects. This only underlines the value of the original idea, Bitcoin. Many people do not see Libra and the Chinese crypto currency as competition for Bitcoin. After all, these projects are not open-source, without permission, censorship-resistant and unchangeable. Whether the release will actually have an effect on the Bitcoin price remains to be seen, but in combination with the upcoming Bitcoin halving, anything can happen.

the other hand, it can also have very positive consequences for Bitcoin, just as Libra’s announcement proved good for the Bitcoin course. Many people see the announcement of this type of project as an approval of the underlying technologies of Bitcoin. It is a good sign that large multinationals and even governments want to use these technologies for their own projects. This only underlines the value of the original idea, Bitcoin. Many people do not see Libra and the Chinese crypto currency as competition for Bitcoin. After all, these projects are not open-source, without permission, censorship-resistant and unchangeable. Whether the release will actually have an effect on the Bitcoin price remains to be seen, but in combination with the upcoming Bitcoin halving, anything can happen.