The fact that China is cracking down digital currencies does not mean that they are not researching and getting information about them. This was confirmed when the Governor of the People’s Bank of China Zhou Xiaochuan stated that paper money might one day become obsolete. Zhou went on to say that they are looking into cryptocurrencies as they also search for cheaper, faster and more convenient payment methods. He, however, warned that the current digital currencies like Bitcoin are used more for speculation than payments.
“It’s our obligation to prevent major mistakes that would lead to massive losses that’s why we are cautious. We don’t want to be part of products that are majorly speculative and making people believe that they will become rich in a short period.” Zhou said this during his last public appearance before his retirement.
China has of late been the center of cryptocurrency talk after it banned the trading of cryptocurrency in its country. Before the ban, China was home to world’s biggest exchanges and also controlled more than 60% of all the worlds Bitcoin. The ban hit the market last year a move that greatly affected cryptocurrency prices.
China still remains the biggest market for digital payments because of the popularity of tech platforms developed by giants like Alibaba Group and Tencent Holdings Ltd. Recently there was a rumor that Alibaba would join Bitcoin mining or even launch its own digital currency. The company founder, however, said that they had no plans to start mining Bitcoin. He, however, said that they were researching about the Blockchain technology.
With China still doing research on cryptocurrency is it possible for it to make a comeback with its own national currency? Venezuela has already launched its own currency called Petro. Even though people may avoid the national currencies, it could be a way governments could use to compete with the current ones.