Could the People's Bank of China Persuade the Chinese Government to Introduce a Yuan-Pegged Stablecoin?
By Tyler S – Cryptocurrency Investor
Researchers at The People’s Bank of China (PBoC) have reportedly suggested that the Chinese government should explore the possibility of launching a Yuan-pegged stablecoin as found on China Finance. It is looking at the opportunities and issues of digital stable tokens.
Digital currencies have gained attraction from all over the world with its distinguished features offering anonymity, decentralisation and fixed transactions. It has also had a reputation for money laundering and value instability. The idea of a stable currency has been created to enter the digital currency space but the stabilisation of digital assets surrounding it still lacks regulation.
Stablecoins have the advantage of using blockchain technology and reducing the price volatility. By bypassing the commercial bank and making cross-border payments more cost effective without any time or space restrictions, stable currencies have the potential to be a great investment despite their current volatility.
The impact moving to digital currencies affects the traditional financial system in many ways. It could make many bank services decline as people exchange traditional currencies for digital and as the digital currency is decentralised, it offers a service they do not currently offer. Examining the success of the US dollar stable currencies, the US Government will look to approve more stablecoins in the future. The current size of the market is small and would need to become widely used until it has a big impact on crypto buying and the traditional finance system. Buying and selling Bitcoin amounts to 52% of the cryptocurrency market share so stablecoins still have a long way to go.
As China has banned cryptocurrency transactions, it is currently researching into the blockchain technology arena. The strict rules China has may change if the US stable currencies become commonly used in the market place. BC Bitcoin will be watching the status of the US stablecoins closely as when this does become widely adopted, other countries may follow suit potentially inducing more to buy bitcoin.
If you would like to invest in buying crypto when it comes to stablecoins, get in touch with us.