China has always been secretive about its activities, whether it be military or financial. Recently, China had banned crypto mining, citing electricity shortage. However, due to the political climate of the country, many pointed fingers at other possible reasons. Apart from that, China is also rising in power significantly in the global scene. It seems that China is also focussing on the crypto industry. Whether that’s good news for Chinese crypto enthusiasts or not remains to be seen.
CBDC is centralized digital coins that are being preferred by quite a few banks. Almost 86% of banks prefer CBDC and most governments are moving towards integrating them in their structure. The Federal Reserve Bank of New York has even set up FinTech research wings. CBDC refers to centralized banks’ digital currencies. However, these currencies seem to defeat the very point of cryptocurrencies and their decentralized nature. According to SBI, as of today, China is now leading the race when it comes to CBDC. It’s a nation that has kept itself updated with the developments in the field of CBDC. Moreover, due to the authoritative nature of China and its control over its citizens, CBDC might seem even more attractive to the nation.
The USA has also set up research wings for CBDCs and Banks are already looking forward to their launch. How these currencies interact with existing decentralized cryptocurrencies remains to be seen. It will be very interesting to see how the power dynamics play out from an outsider’s perspective.