According to an analyst, China’s complete control of the digital yuan would increase demand for cryptocurrencies.
According to a BK Asset Management analyst, China’s campaign for the digital yuan would fuel demand for cryptocurrencies because the Chinese government needs “total control” over its citizens’ wealth and profits.
The introduction of the digital yuan could increase demand for cryptocurrency.
According to CNBC, Boris Schlossberg, managing director of BK Asset Management’s FX Strategy, said in a note last week that China’s full influence over its central bank digital currency (CBDC) would push up demand for cryptocurrencies.According to the wealth management firm’s website, Schlossberg has more than 20 years of stock market expertise and is “widely regarded as a leading foreign exchange specialist.”
According to the observer, the Chinese government’s primary motivation for implementing the digital yuan is to gain “total control” over its people’ resources and income.
“The Chinese government has tremendous influence over the economy because the digital yuan is both programmable and trackable,” he said. “Not only can Chinese policymakers be aware of any consumer decision taken in the economy, but they will also be able to influence purchasing behaviour explicitly by having the currency expire at a certain date.”
However, it is precisely this policy goal that will fuel crypto demand in the future. Despite crypto’s inherent uncertainty, the practice of turning at least a portion of one’s resources into crypto assets will continue, as many Chinese entrepreneurs and consumers are well informed of the government’s plan to exercise utter control over personal assets.
Meanwhile, CG Lai, CEO of BNP Paribas’ China operation, believes the People’s Bank of China (PBOC) is launching the digital yuan “because they want to make the domestic financial institution far more effective,” according to the news outlet.
Although she emphasizes that no one knows how the Chinese central bank’s digital currency would be implemented, she sees “clear advantages for the Chinese in attempting to encourage bitcoin… on the cross-border hand.”
China recently reaffirmed its crypto crackdown statements from 2017, which some believe is the Chinese government’s attempt to reduce competition for the digital yuan. China has been putting its digital currency to the test in a number of cities, including Beijing, by handing out “red envelopes” of digital yuan for people to buy.
Bitcoin News announced earlier this month that China’s wireless yuan smart card includes biometrics and fingerprint scanning.