According to a specialist, China’s digital yuan will point to the dollar, not Bitcoin

After learning what is needed from crypto space and blockchain technology, China will try to compete with the US dollar, not with Bitcoin (BTC), through its long-awaited digital yuan.

Matthew Graham, an experienced investment banker in China and CEO of Sino Global Capital based in Beijing, analyzed and reasoned about what is currently known about the upcoming digital currency The Chinese government sees new technologies as a great opportunity to break the dollar’s hegemony.

In conversation with the founder of Box mining, Michael GuAt the Unitize conference on July 6, Graham said that it is extremely difficult for China to internationalize the renminbi:

“Quick, CHIPS, Fedwire […] They are out of date, they are expensive, they are slow. We are in 2020 and there are transactions that take three days and are much more expensive than they should be. All of these technologies, which support much of the dollar-based global economy, are really showing their age. So it’s a great opportunity [para China]””

According to a specialist, China’s digital yuan will point to the dollar, not Bitcoin
According to a specialist, China’s digital yuan will point to the dollar, not Bitcoin

Beijing uses the acronym DCEP to refer to its next digital money electronic payment system And, as Matthew Gu noted, it “borrowed a lot of its blockchain technology details,” including concepts like UTXO.

However, DCEP is far from being a public blockchain network like Bitcoin. According to reports is issued by the People’s Bank of China and will remain under the full control and authority of the central bank and other current national fiat currencies.

Graham emphasized: “If you get close to that [DCEP] From a cryptocurrency or blockchain platform perspective, it will be very difficult for you to understand what it is and why it is so important. ”

New technologies integrated into the digital yuan, including the acquired aspects of blockchain technology, are used for another purpose. Gu quoted comments from the president of the China International Economic Exchange Center, who previously said:

“DCEP can achieve real-time collection of data related to money creation, accounting, etc. and provides a useful measure of money supply and monetary policy enforcement.”

Graham added that the monetary policy DCEP “could be very helpful in implementing negative interest rates”. Also, “opens up many opportunities related to AI and machine learning for fraud detection […] And there are also possible aspects of programmability. “

In contrast to systems such as Fedwire, CHIPS, SWIFT – the “tubes” that support much of the global dollar economy. This, as Graham emphasized, They are “technologies from thirty, forty, fifty years ago, with all the friction and cost.”

“There’s a jump shot here,” he said. “DCEP is not about Bitcoin. It’s about at least partially internationalizing the renminbi.”

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