Are China and EU Warming Up to Digital Currencies?

  • November 14, 2019

Digital currencies have always been under scrutiny, ever since they were first introduced, and with good reason. The Blockchain technology behind the currencies and the general working model of these cryptocurrencies is a bit of a hard concept to come to terms with. It is no surprise that many countries and financial influencers were initially against the whole idea of digital money. 

China and the European Union were quite vocal in raising their concerns against the new technology. In 2017, China declared war on digital currencies. The government banned fundraising through ICO offerings which ultimately led to the shutdown of the largest crypto exchanges in the country. The EU, on the other hand, voted to have Bitcoin and other cryptos banned. 

However, it seems that the world is now generally moving towards the adoption of digital currency use. A few weeks ago, reports emerged that both China and the EU were looking to come up with their digital currencies. Could these two powerhouse regions be warming up to cryptocurrencies? And if so, what effect will it have in the cryptosphere? 

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The People’s Bank of China Plans to Introduce Its Digital Currency

The 2017 ban on ICO offerings crippled the crypto exchange market in China. It, therefore, comes as a surprise that the People’s Bank of China, PBC, wants to introduce a digital coin. On 5th August, Global Times published an article claiming that PBC had applied for 74 patents involved with digital currencies to speed up the development of a legal digital currency. 

According to Huang Zhen, a professor at the Central University of Finance and Economics, China is increasing its efforts to innovate a digital currency which is a worldwide trend driven by emerging technologies.

China already adopted digital payment technologies, and crypto experts hope that the digital currency by PBC will further China’s ability to build financial solutions. They add that it is an improvement to see the adoption of digital currencies in China, although it comes with a limiting factor. 

The proposed approach will be run by the government and cannot, therefore, be considered decentralized. 

EU May Launch Its Version of Bitcoin

Earlier this year, Facebook announced its plans to launch Libra, a stable digital currency. This announcement was met with broad hostility from the EU. The French Minister for economy and finance blocked Libra’s development in the country while politicians in the UK coined it an attempt to make Facebook its own country. 

Now, it seems that the EU wants to launch its version of Bitcoin. Following the hostile response to Libra, an EU draft document has emerged, urging the European Central Bank to launch its digital currency. The draft further encourages the EU to adopt a common approach to cryptocurrencies, which may include banning risky projects. 

The Finnish EU presidency prepared the document. EU finance ministers are expected to discuss the draft in the coming week, which could lead to adoption early next month. 

Although the bloc has raised concerns over digital currencies, there aren’t any concrete regulatory measures against cryptos. This could, therefore, be the first step in statutory laws concerning cryptos in the EU. 

 

We cannot deny that cryptocurrencies are the next big thing. This technology is bound to be revolutionary, and it is about time that governments across the world accept the change. With blockchain innovations such as Blockard, you can easily store and send your cryptos, making it easier for the adoption of a global crypto payment system. The adoption of digital currencies by China and the EU could go a long way in the mass adoption of cryptocurrencies.