Bitcoin’s surge could drive the digital renminbi’s interest rate, the People’s Bank of China said.
According to Cointelegraph, a media specializing in cryptocurrency on the 2nd (local time), the central bank said that despite the fact that cryptocurrency is still banned in China, the recent surge in bitcoin has attracted great interest in the CBDC project.
After the CEO of the People’s Bank of China (PBoC) announced that the recent surge in bitcoin has raised interest in the domestic digital renminbi project again, the cryptocurrency space may help mass-produce its own competitors.
The digital renminbi is China’s central bank digital currency, and like all CBDCs, the basic principle is completely contrary to the principle of the original cryptocurrency space.
The concept of cryptocurrency, where decentralization and autonomy are key, will be distributed favorably to centralization and supervision, which is part of an effort by government authorities to more easily control the flow of money. The digital renminbi is also expected to become the centerpiece of China’s smart city ambitions, in which the whole city will be made cashless in the next few years.
However, PBoC believes that the’very big’ interest in the digital renminbi is the result of the recent bitcoin breaking an all-time high despite the fact that cryptocurrency is still banned in China.
Wang Xin, director of research at PBoC, said interest in the digital renminbi was driven in part by the following ambitions of other countries and the rising price of bitcoin. “On the one hand, this has to do with more and more world central banks participating in the development of domestic digital currency, while interest rates may also have to do with a huge rise in bitcoin prices,” he said.
Meanwhile, China has conducted numerous pilot tests of digital renminbi over the past few years with biometric hardware wallets, street ATMs, and national lottery lotteries.