China’s Digital Currency Will Eliminate the Need for Swift Says Huang Qifan
SHANGHAI – Huang Qifan, a member of the Communist Party of China, and former major of the city of Chongqing discussed China’s role in the future of the global economy saying that digital currency will eliminate Libra, other national cryptocurrencies and even the traditional SWIFT system, underlying our banking transactions.
Right after president Xi Jinping made publically known the importance of blockchain technology for the Asian superpower, Qifan elaborated on the matter during the Bund Summit that took place in Shanghai between Oct 27 and Oct 29.
The Vice President of the Chinese Center for International Economic Exchanges said that the People’s Bank of China (PBOC) has been developing a digital currency for the last six years, and it is likely to be the first central bank to lunch a state-backed cryptocurrency in the world.
The new financial system which will be the backbone for a digital renminbi (China’s local fiat currency), is said to be independent of the traditional SWIFT system, which pretty much enables every banking transaction on the globe.
That should make obvious sense to crypto-investors, as blockchain technology operates in its own unique decentralized distributed network, unaffected by third-party authoritarian mechanisms such as governments and financial regulators. At least that is what blockchain is created for, and this aspect can be found in cryptocurrencies such as Bitcoin, but any national-level stablecoin and/or cryptocurrency should not be necessarily put in the same sack as traditional layer 1 cryptocurrencies.
A government-issued digital currency that utilizes blockchain technology can be faster, cheaper and more reliable compared to physical monetary value, yet it is not necessarily a transparent and public blockchain.
China might be the first to publically praise blockchain technology, and probably the first to officially launch a state-backed cryptocurrency, but others will undoubtedly follow, with Russia, Germany, and France being among the first countries to express similar visions on a national scale.
Bitcoin recently sparked a move that surpassed 30% in gain. Many speculated what might have caused the sudden ‘awakening’ of the leading cryptocurrency by market capitalization, with the most logical explanations tending to involve Xi Jinping’s speech during the 18th collective study of the Political Bureau of the Central Committee that took place in Beijing last Thursday.
The time-frame is indeed very convenient to be a simple coincidence, although an earlier report published on Sep 29 by the Center for Information and Industry Development of China suggested that Bitcoin was far less considered as a viable technology compared to EOS, Tron, and Ethereum which led the list of the study.
The 30% gain may be caused by the FOMO gang when blockchain and cryptocurrencies become a public national interest and not just speculation as previously considered by many governments.
Nevertheless, it seems like China is true to its word, already in a race to be the global leader in blockchain with a national digital currency which will probably serve as the pilot use-case with more sophisticated applications being developed right around the corner.