Cryptocurrency Opinion

What is the Role of Cryptocurrency in the Dollar Versus the Digital Yuan

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Since the emergence of Cryptocurrency every major and minor investor is trying to be an active part of the market. In this website, when financial services are shifting digitally users of cryptocurrencies are increasing. China, a country that grabs all the possible options to be on the forefront globally identified Crypto as one big opportunity. 

We all know how after the first mining of Bitcoin in 2009. China emerged as one of the biggest participants in the mining and trading of cryptocurrencies. When we talk about currency, paper currencies are the first to come to our minds. The Dollar is the most powerful traditional currencies and we cannot deny the impact of the Dollar on the traditional currencies. 

Keeping this in mind, China took the right call at the right time by investing and trading in Cryptocurrencies. But later, things changed and the country launched its digital currency the Digital Yuan. 

All about the dollar vs the digital yuan:

The dollar is a currency that needs no introduction and dominates the traditional currencies. China always tries to hold the most powerful position around the globe. When cryptocurrency was introduced and the first Bitcoin mining took place. After a year of that China became one of the leading users of cryptocurrencies. After some time, things started shifting against the use of cryptocurrency. 

The reason was China’s digital currency, the Digital Yuan. It took almost 8 years for China to launch this currency for trials among common people. This currency is stored in digital wallet apps as well as physical wallets embedded with digital Yuan chips. These chips are developed by the Postal savings banks of China. The central bank distributed this currency in the wallets of people via six commercial banks. 

Some reports suggest that Digital Yuan is not as satisfactory as other digital payment modes in China. There are already some tech giants which have occupied the financial market in China. So, becoming the other bigger currency and fulfilling the demands of the users could be a little difficult for this digital currency. 

In launching the Digital Yuan, China has some of its motives like keeping a check on all the transactions happening which is nearly impossible in the use of paper currency. To take back control of money in their own hands which are in the clutches of private firms. And lastly, to stand out in the financial market globally. 

Internationalisation of the digital yuan:

Any currency which wants to hold a strong position in the financial market would have to go through Internationalisation. China already has a roadmap for this and that is the winter Olympics. All the athletes from all the countries will exchange their currencies for digital Yuan in their respective wallets. 

Other countries could not trust China with their digital currencies. As in the past, many reports say that China tries to get people’s sensitive information by peeping into their digital devices through some apps. In this scenario, it would be difficult for the Digital Yuan to get globally recognized. 

One of the reasons for the popularity of cryptocurrency is the maintenance of the anonymity of users. But, Digital Yuan does not promise complete anonymity, instead of controlled anonymity. The central bank of China has also said that to use Digital Yuan, you need to register with your Mobile number which is again not in the favour of the Internationalisation of the Digital Yuan. 

China and cryptocurrency vs digital yuan:

Just like the nature of cryptocurrency, the relation between China and Cryptocurrency was too volatile. Just after two years of Bitcoin mining, China came with its first Bitcoin exchange which allowed citizens to invest and transact in cryptocurrency. After that, it went smoothly until in 2017 China banned Cryptocurrency. 

Now, China is all set to make it’s Digital Yuan a global currency and to compete with the dollar as well as cryptocurrency. But in all this, one fact was unignorable: the emergence and success of the cryptocurrencies is the reason for the Digital Yuan debut. The Dollar Versus Digital Yuan is a long way to go as the Dollar already has its reputation and power over other currencies. Meanwhile, Digital Yuan has just launched and is yet to go through the process of Internationalisation. 

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