Circle CEO Jeremy Allaire said that China’s research and development on CBDC outclass its peers and the digital version of Chinese Yuan could possibly bypass the Western banking system.
Over the last few months, big organizations and government institutions have shown interest in the crypto space. China’s central bank – People’s Bank of China (PBoC) – has fast-tracked its work on introducing a central bank digital currency (CBDC) to the market. However, China’s attempts to launching a CBDC come as a measure to counter the potential competition by Facebook‘s Libra.
Commenting on this, Circle CEO Jeremy Allaire said that China has the most progressive approach towards CBDC. Though governments across the globe have been experimenting with it, China’s economic might and execution capabilities outclass others.
In an interview with Phoenix Chinese News on Monday, September 9, Allaire underlined PBoC’s advanced thinking on CBDCs. He further asserted that PBoC is the only central bank working on CBDC with research orientation. This gives the Chinese central bank an edge over other CBDC projects.
Allaire also discussed the potential interaction of digital Yuan with other dollar-pegged cryptocurrencies in the market. He said:
“For us, we’ve been working for multiple years on the US Dollar coin that’s been growing very fast. And I think that we’re excited to see how things like the Chinese central bank digital currency could eventually interact or be traded with things like US Dollar coin.”
China’s CBDC Dominance in Future
Although China has completely banned public cryptocurrencies in the country, it still understands the importance of crypto assets and the blockchain technology behind it. China’s early move in the CBDC market is likely to give the country an edge over other competing economies. The PBoC has said that it will launch its CBDC as early as November 2019.
Recently, the stablecoin firm Tether also announced its Chinese-Yuan pegged digital currency CNHT. However, it remains to be seen how far it can sustain in the market once PBoC digital Yuan is out on the market.
On the other hand, the United States is struggling to overcome regulatory issues. Citing future competition in the crypto market, Facebook has already announced its Libra cryptocurrency scheduled to launch next year in 2020. However, it has had a tough time dealing with the regulators. As such, Facebook has announced that its Libra cryptocurrency will be tied to several major fiat currencies, except the Chinese yuan.
In his interview, Allaire also said that the digital version of Chinese Yuan could possibly bypass Western dominance. It means China could likely create its own space and demand for digital Yuan while strengthening its economic position.
Nevertheless, now w can expect that these moves are likely to create interesting competition in the crypto market, in the future.