Will China’s cryptocurrency arrive earlier?
According to a recent report, China is testing its cryptocurrency (CBDC) on a mobile app. Another said that some of the organizations behind the project, including the People’s Bank of China (AliCay), AliPay and Tencent, are already testing an initial version in the New Xiongan Area.
Although previous information maintained that digital currency would initially be used for retail payments and Communist Party members paid their membership fees, today’s local news suggests two different main objectives for China’s CBDC.
First, it could arrive earlier to combat possible threats from the US to local financial institutions and the international yuan deal.
“Although the United States does not include Chinese companies and financial institutions in its List of Entities, the United States can still pose widespread threats to Chinese institutions and impact the yuan’s position in international agreements. In that regard, China’s state digital currency may be launched earlier than expected to combat a possible US bloc. ”- said Cao Yin, a member of the Beijing blockchain industry.
In addition, the country will use the CBDC to implement large-scale stimuli for the post-COVID-19 economy. Yin explained that “blockchain-based digital currency tracking features can help the flow of money to the real economy and to businesses in need”.
Sanctions between the US and China
The two largest economies in nominal GDP, the USA and China, are in evident conflict once again. The last act of this week accelerated the tensions, after the Asian country proposed new national security laws for Hong Kong with the aim of banning sedition, secession and subversion.
Thousands of citizens came out to protest against it, as most believe that the law could compromise politics: One country, two systems that allow Hong Kong to maintain its own economic and administrative operations. Local police fired tear gas and a water cannon to disperse the demonstrations.
According to US national security adviser Robert O’Brien, the new legislation could allow China to “basically take over Hong Kong”. Therefore, he believes the United States will continue with its initiative to impose sanctions on both.
“If they [aprovarem a lei], the Secretary [de Estado] Pompeo is unlikely to be able to certify that Hong Kong maintains a high degree of autonomy and, if it does, there will be sanctions that will be imposed on Hong Kong and China. ”