The world of cryptocurrencies has taken multiple phase changes over the past few years with the last couple of years seeing a pick-up from traditional departments. One of the most popular innovations in the space was the concept of centrally backed cryptocurrencies.
State-backed digital currencies are not a new idea as countries like Venezuela have been dabbling in the field for quite some time now. Steps taken by China to create its own digital currency have elevated the industry to new heights, with the Red Dragon making rapid progress on the back of new developments.
China’s digital renminbi took the world by storm when it was first revealed by the People Bank of China. The entire cryptocurrency market received a boost when Xi Jinping endorsed the concept of blockchains and the future of digital payments. According to new reports, China has kept its promise of delivering a seamless payment system after conducting multiple large-transfer tests.
Yi Gang, the governor of the People’s Bank of China recently stated that more than 2 billion yuan [approx. $300 million] was spent using the country’s digital currency. The large sum was transferred in 4 million sperate transactions, a feat worth mentioning. The country has placed its bet on the speed of blockchain networks as China also has plans to replace physical cash with virtual currencies.
Officials close to the developments touched on how the digital currency will work. The country has ingrained its statehood in the CBDC as the currency will be first issued by the People’s Bank after which private companies and corporates can make use of it. Speaking at Hong Kong’s Fintech Week, Yi stated that the 2 billion yuan was spent in four cities via 12,000 payment scenarios. In a previous test, the Chinese city of Shenzen saw its citizens using state-provided CBDCs.
The PBoC governor admitted that the banking infrastructure expected the dawn of cryptocurrencies to arrive soon. This is a marked shift from earlier years when anything other than fiat currencies was considered a bane to all financial environments.