The cryptocurrency space may help spawn its own competitors after a representative from the People’s Bank of China said Bitcoin’s (BTC) the recent surge had sparked renewed interest in the nation’s digital yuan project.
The digital yuan is the digital currency of China’s central bank, just like any other CBDCs its fundamental principles are completely antithetical to those of the cryptocurrency space.
Core concepts of decentralization and autonomy are dropped in favor of centralization and supervision, in an effort by government agencies to more easily control the flow of money. The digital yuan is also expected to be at the heart of China’s smart city ambitions, making entire cities cashless in the coming years.
But the PBoC believes the “very strong” interest the digital yuan is receiving is the result of Bitcoin’s recent surge to new all-time highs, despite cryptocurrency still being banned in China.
PBoC research firm director Wang Xin said interest in the digital yuan was driven in part by other countries’ ambitions to follow suit, as well as Bitcoin’s price increase. According to CNBC’s mandarin translation of his comments, Xin said:
“On the one hand, this has to do with the fact that more and more central banks in the world are participating in the development of domestic digital currencies. On the other hand, this (interest) can also be related to the sharp rise in the price of bitcoin. “