Wang Xin, a Director at the Peoples Bank of China (PBoC), has said that there’s an increased interest in digital Yuan. He said that the heightened interest in the virtual currency is down to two reasons: first is the rise in the number of national banks working on creating their own local virtual currencies while the other reason is the rising price of Bitcoin. It is important to note that China has placed a ban on the use of Bitcoin.
Though there is no launch date in sight for gbe Chinese digital currency, the PBoC has however continued to carry out pilot tests of the digital currency in various parts of the Asian country. So far, Chinese authorities have airdropped about $6.2 million worth of digital Yuan. The PBoC is working towards have its central bank digital currency (CBDC) ready for the 2022 Olympics.
Will CBDCs threaten Bitcoin?
Several nations have accelerated the development of their local virtual currencies. Bahamas was the first country to release a CBDC referred to as the “Sand Dollar.” According to their apex bank, the Sand Dollar will enable both the banked and unbanked citizens have access to financial services and other regular payment platforms.
The Sand Dollar has enjoyed enormous success in the Caribbean country. Recently, MasterCard partnered with the Bahamas central bank to enable users to change their virtual currency to fiat to pay to make payments. Since then, several other nations – Japan, UK, Switzerland and Sweden have all been researching into the feasibility of developing a CBDC.
There are arguments about rivalry between CBDCs and cryptocurrencies such as Bitcoin. However, the Bitcoin community remains confident that these national digital currencies will not replace coin because of its decentralized nature.