The central bank of China observed an increase in popularity for the Chinese CBDC Digital Yuan. The CBDC project aims to aid China in competing for the digital pursuit by means of substituting a considerable amount of its traditional fiat currency.
Credit goes to Bitcoin for Digital Yuan interest according to Chinese Central bank
According to the People’s Bank of China research bureau director Wang Xin, if the Digital Yuan ever becomes successful in the future, an enormous chunk of credit goes to Bitcoin.
CNBC translated the director’s statement quoting that the rise of interest in the Digital Yuan could also be possible because of a recent increase in popularity of different countries taking part in the development of their own CBDCs.
However, Wang did not give all the acclaim to the rise in popularity of CBDCs in other countries but pointed out the increase in Bitcoin price might have equally affected the recent spike in interest for Digital Yuan.
Presently, the People’s Bank of China has not released an approved date for the release of their CBDC Digital Yuan However, the determination expressed by the central bank is abundantly clear. Who is willing to back the pilot project so the citizens of China can use and test the project on retail shops on a small scale initially from which the bank can learn and gain experience.
Should CBDCs be considered a menace to Bitcoin?
Several countries that we’re considering going digital are now incorporating CBDCs within their respected countries. Activities linked with the integration of CBDCs have spiked since the previous year of 2020. Testing, exploring, and researching CBDCs have become extremely popular among various countries like the UK, Switzerland, Sweden, and Japan.
The sand dollar, a CBDC issued by the central bank of Bahamas, was essentially the first government-backed digital currency. According to the Bahamas’ national bank, the digital currency will provide access to various financial services and mainly regulated digital payments.
The move by the Bahamas’ central bank is a successful one since Mastercard integrated the digital currency with their financial service that allows users to make payment from their digital currency, which can be converted into a traditional fiat currency used for purchasing goods and services.
Recently, a possible clash between CBDCs and autonomous digital currencies has begun, which states that CBDCs will eventually supersede an autonomous digital currency like Bitcoin. Nevertheless, Bitcoin supporters infer, because of independent digital currencies’ level of decentralization, the prospect of CBDCs substituting independent digital currencies is far-fetched.