China could soon replace Bitcoin and other virtual currencies, as it is planning to come up with a national digital asset developed by the People’s Bank of China (PBOC).
It might be possible for the Chinese government to have more control over its financial system by introducing its virtual currency, it would also enhance the People’s Bank of China’s (PBOC) ability to tackle money laundering activities and tax fraud.
Bloomberg reported that the People’s Bank of China, which is the country’s central bank, seems to be searching for the way to introduce a national cryptocurrency. The project was initiated by Zhou Xiaochuan, former governor of China’s central bank.
It was clear that Zhou Xiaochuan did not have interest in virtual currencies, he said:
“We don’t like speculative cryptocurrency products since it is not a good thing to give people, an illusion of getting rich overnight.”
Why does China want to destroy Bitcoin?
Chinese researchers conclude that Bitcoin is in ideological opposition to China’s communist policy which can ‘weaken or destroy it.’ Many foreign countries look to cryptocurrencies like Bitcoin as a safe investment due to the lack of financial infrastructure in their country, or due to the way their governments control traditional fiat currencies.
China may seek to attack Bitcoin as a way to indirectly attack an enemy country and destabilize its already fragile economy.
The central bank has registered around 78 patents related to virtual currencies since 2016. Although the virtual currency could be introduced in a relatively short period of time, the expansion in the market will be gradual.
According to a patent filed by the bank, at the same time banks will have to gather information about borrowers and interest rates before they are able to transfer these funds, which also helps to blacklist individuals and companies from taking loans.
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