When cryptocurrency became mainstream in 2018, its autonomy, privacy, and lack of third-party interference attracted countless investors. It also gave rise to many ecosystems with their own set of regulations in the form of DAOs. The effects of decentralization were felt in Finance as well, with DeFi becoming a household concept. With the fear of losing control of currency, many countries like China and Russia banned cryptocurrency in their country. Now in 2022, both of these countries are looking to adopt the concept in their own way. China’s digital currency is a bit different from coins such as bitcoin, Ethereum, Dogecoin, Litecoin, Shiba Inu, etc. Let us explore the differences between conventional blockchain-based tokens and China’s newly launched Digital Yuan.
Where Can You Buy China’s Trackable Centralized Digital Coin?
The main objective of the country is to make a digital China where people can easily transact with a single mobile application without the need for an internet connection. The government will track every transaction, no matter how small.
The digital yuan is not a type of cryptocurrency. Many other countries are also working on launching their own digital currencies as a result of this inspiration. China is the first mover to launch this digital yuan, but the time frame is not specified. Several people used cryptocurrency when it first became popular to exchange illegal goods and services, evade taxes, etc. Every country’s central bank was very frustrated because they feared losing the value of their domestic currency. As a result, many central banks began banning cryptocurrencies. China has also banned crypto because it does not have a track of the currency, and that’s why they launched digital currency so they can track every small and significant transaction of a citizen, and no one can avoid this.
Blockchains Illegal Due to Privacy Concerns, China to Heavily Regulate & Track Token Value as The Renminbi
Below are the points that distinguish digital cryptocurrency from china’s digital currency:-
- Due to the fact that it was launched by the People’s Bank of China (China’s central bank) and is under the supervision of the Chinese government, the Digital Yuan is purely centralized. China banned cryptocurrency from tracking people’s spending, but now the digital yuan is so easy to track that citizens’ expenditures can be tracked in real-time. Since it was designed to remove third parties’ control, the cryptocurrency is not under the government’s custody or the national authority of every country.
- Digital yuan is legal in China because it was initiated by the government. All the control of the digital yuan is in the hands of the Chinese government. However, cryptocurrency is still an unregulated currency.
- The digital yuan value gets fixed as the renminbi, and it cannot increase or decrease without the approval of the People’s Bank of China or the government of China. Depending on the circumstances, the central bank or government may alter the value of a currency. The value of the cryptocurrency is out of control because no one is tracking or controlling it, and it all depends on the belief of the people.
- We can use cryptocurrency globally, and anyone can trade it easily, except that it’s not banned in the country. Because crypto coins are global currencies, their value will remain the same in every country. However, the digital yuan is still in its initial stages, so it is now a domestic currency, meaning that only Chinese citizens can use it. Digital yuan is now available in the domestic digital stores of China on every mobile device, and anyone with a bank account can use it.
- Cryptocurrency privacy is public because it works on the blockchain system, and all the transactions get public on this platform where everyone can see the transaction. But digital yuan is a private digital currency that only the government and central bank of china can see the transactions, and no others are eligible to see.
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Via this site Is digital yuan a type of cryptocurrency? – Techstory