Is China’s Aggressive Approach Towards Blockchain Good or Bad For Decentralized Space

Vandana  |  Aug 26, 2020

As the world is moving towards digitization, industries across the world are trying out different measures to improve this digital life. Blockchain is that one thing that is playing a huge role in almost all the different sectors across the world. Industries have started adopting blockchain technology very actively and are trying out its various use cases. It is the kind of technology that is bringing complete transparency and trust in the whole ecosystem. As it is clear that China is the second-largest economy of the world, the country is also rapidly moving towards blockchain technology. 

China is that country that is aiming towards getting a global scale when it comes to its economy, diplomacy, or any other thing possible. It is quite evident that the country is rapidly moving towards development and innovation in different sectors to achieve the status of a global leader. Blockchain technology could be seen as one possible solution to move a step ahead towards achieving its goal. 

Aggressive blockchain technology adoption in China

It has been seen that the country has been maintaining a strict position when it comes to cryptocurrencies that are developed privately. However, the Chinese government is showing great interest in blockchain technology and is encouraging the people out there to adopt the technology. Both the public and private sectors in China are seeing some huge developments when it comes to blockchain technology.

The government has introduced a lot of applications that are based on blockchain and is encouraging industries and individual developers to explore blockchain technology and utilize it in various projects. Such a huge adoption of technology will also prove to be highly beneficial for China’s central based digital currency (CBDC). 

China has also launched its Blockchain Service Network (BSN) which is aimed to help the developers in building up blockchain-based applications easily. It is believed that if BSN will be successful in its operations that it is going to be adopted by different countries globally. Through this, China is going to establish its fundamental stone for becoming a leader in blockchain technology. A huge increase in blockchain adoption could be seen in China during the COVID-19 pandemic. During this time, the country was looking forward to blockchain jobs as a completely new opportunity for the individuals as well as enterprises for growth. Along with the growth, it will also increase the blockchain adoption which will complement the aggressive approach of the country to this technology.

China’s CBDC might be a threat to the US Dollar

Currently, the world is trying to overcome the COVID-19 pandemic and it has become the area of major focus for most of the countries. Meanwhile, China has been doing some huge developments in its blockchain industry and is now working towards the launch of its central based digital currency (CBDC). With this launch, China is going to become the first major country to launch its CBDC. 

China is increasing the adoption of blockchain technology rapidly and this is also indicating a successful launch of CBDC in the near future. Through this, China is aiming to change the future of money and people’s perspective towards it. Due to the early adoption of CBDC, China is going to set a global standard for all other countries who are also aiming to launch theirs. Along with this, Digital Yuan will be widely accepted across the world and China is an authoritative country, it is going to challenge the dominance of the US Dollar. 

It has been seen that through its CBDC, China is trying to increase its global influence. China’s Belt and Road initiative could also be seen as one major factor that can help the country to increase dominance. Through cross-border transactions, China is trying to create an alternative to the US-centric financial system. If the country will be successful in doing so, it will surely emerge as a threat to the world power of the US Dollar. It is also revealed that China might also use its CBDC for bilateral trade which will also remove the need for the US Dollar.

Along with the US Dollar, it is also believed that the launch of CBDC might also be a threat to Bitcoin mining as well. China has never supported cryptocurrencies and even when it is trying blockchain widely, it is still not showing any kind of support to the development of cryptocurrencies. Currently, China is controlling around 70% of the total crypto mining operations across the world. This means that if China will keep its strict stand for cryptocurrencies as it is then, there will be a huge loss for crypto mining operations that are going around in the country.

Conclusion 

The rapid adoption of blockchain technology is extremely important for the complete decentralized space. The launch of China’s CBDC is having the potential to bring a change in the complete global financial ecosystem. However, the authoritative nature of China also seems quite alarming for the decentralized space as there will be a complete intervention of central authority in the overall blockchain ecosystem of the company.

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