Chinaâ€™s push for the digital yuan will boost demand for cryptocurrencies, according to an analyst at BK Asset Management, citing that the Chinese government wants â€œabsolute powerâ€ over the wealth and income of its citizens.
Digital Yuan Push Could Raise Demand for Crypto
Boris Schlossberg, managing director of FX Strategy for BK Asset Management, said in a note last week that Chinaâ€™s absolute control over its central bank digital currency (CBDC) will drive more demand for cryptocurrency, CNBC reported Friday. Schlossberg has more than 20 years of financial market experience, according to the asset management firmâ€™s website which further states that the is â€œwidely known as a leading foreign exchange expert.â€
The analyst said that the primary driver for the Chinese government to roll out the digital yuan is â€œabsolute powerâ€ over the wealth and income of its citizens.
â€œThe digital yuan is both programmable and trackable giving the Chinese government enormous control over the economy,â€ he described. â€œNot only will Chinese policymakers know every consumer choice made in the economy, but they could also directly affect spending behavior by making the currency expirable by a certain date.â€
Meanwhile, CG Lai, CEO of BNP Paribasâ€™ China business, believes that the Chinese central bank, the Peopleâ€™s Bank of China (PBOC), is introducing the digital yuan â€œbecause they want to make the domestic financial institution much more efficient,â€ she told the news outlet.
While emphasizing that no one is certain about how the Chinese central bank digital currency will be executed, she sees â€œobvious benefits for the Chinese in trying to promote the cryptocurrency â€¦ on the cross-border side.â€
Recently, China has reiterated its crypto crackdown announcements made back in 2017, which some say is the Chinese governmentâ€™s way of reducing competition for the digital yuan. China has been testing its digital currency in various cities, including Beijing, giving away â€œred envelopesâ€ of digital yuan for consumers to spend. Early this month, Bitcoin News reported that Chinaâ€™s digital yuan smart card features biometrics and fingerprint scanning.
Do you agree that the push for the digital yuan by the Chinese government will drive up demand for cryptocurrencies? Let us know in the comments section below.
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