China recently endorsed the underlying “distributed ledger” technology of blockchain.
The 13th five-year plan of China, which released in 2016 describes blockchain as a critical strategic frontier technology. It also talked about increased research as well as development in the field of technology and practical applications.
Recently, the president of China, Xi Jinping called for technical innovations for a generation represented by artificial intelligence, quantum information as well as communication and blockchains.
The idea of cryptocurrency id approached sceptically, which can carry the potential to create financial and social instability. They also aim to reduce the financial risks which come along. To achieve so, they have decided not to treat Bitcoin as a currency. Therefore, there is only one official currency of China which is the renminbi or RMB. Don't use plagiarised sources.Get your custom essay just from $11/page
The Chinese government has inclined towards blockchain technology.
In July 2019, after the announcement of Facebook-backed cryptocurrency Libra, the Director of the People’s Bank of China Research Bureau had also confirmed that the Chinese government is launching a research initiative for cryptocurrency.
However, Cryptocurrencies not directly regulated in the PRC. The primary users would interact with cryptocurrencies and are highly regulated, if not prohibited.
However, it is essential to understand that the cryptocurrency is not to used as fiat currency.
China also implements strict capital controls which designed to limit the amount of capital outflow from China to other countries via foreign exchange.
Zhou Xiaochuan, The President of the People’s Bank of China, recently responded in an interview to the news that the People’s Bank of China recognised the replacement of paper money by new technologies as “inevitable”.
The People’s Republic China’s government is more interested in promoting research and development in the field of new applications for blockchain.
The State Council issued an official Guiding Opinion on August 2017 encouraging the development of personalised software. This could be done by opening a source code and the pilot application of new technologies.
The Chinese authorities also disfavour cryptocurrency mining operations because of the burden it puts on public electrical power infrastructure.