China has been notoriously harsh on the development of cryptocurrency, imposing a ban on investing and trading into digital assets, including Bitcoin. However, the executive chairman for the Blockchain Research Institute believes that in 20 years, Chinese national fait currency will be replaced by a cryptocurrency version.
Donald Tapscott, speaking in an interview with Bloomberg on April 17, said that the Chinese renminbi (RMB), will likely undergo a transformation into cryptocurrency format, despite the country’s current stance against the industry. Tapscott told Bloomberg of a meeting he had with a vice-chairman in the Communist Party of China, who revealed that President Xi Jinping is bullish on the outlook of blockchain and views it as one of the most important technologies for his country’s development.
China, which has caused a recent stir with rumors that the country will crackdown on cryptocurrency mining–in addition to its current stance towards trading and investing–state that the ban was likely short-lived,
“It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”
Industry analysts have pointed to the development of decentralized exchanges (DEXs) as a way to circumnavigate political influence on cryptocurrency marketplaces. While Tappscott contends that DEXs are one way to operate in China, he reports that the country is adamant on clamping down on all forms of crypto-based investment.
Instead, Tappscott believes that the future of decentralized exchanges is to supersede existing centralized platforms, thanks to what he calls their transparent framework and ability to identify manipulation. Tappscott could see a broader market migration to DEXs, including securities.
Despite having the majority of the world’s largest mining pools based in China, the country is giving indications of a looming crackdown on cryptocurrency mining. Chinese authorities have been discussing the issue, with the National Development and Reform Comission (NDRC) reportedly including mining in a revised list of activities to be shut down. Among a number of issues, the agency finds that cryptocurrency mining wastes resources and pollutes the environment, harping on the point that Bitcoin is not energy efficient.
However, China is also leading the world in the number of blockchain projects under development, despite the government’s stance towards investing in cryptocurrency. Even if digital assets continue to be a point of contention for politicians, the technology of blockchain has garnered serious interest, with 263 blockchain-related projects underway–a full quarter of the global total.
Tappscott’s comments reflect a growing belief that tokenized currencies, supported by blockchain, will be the future for fiat as money turns digital. The renminbi, propelled by China’s massive boost in blockchain development, could make the transition to cryptocurrency even if the government ban continues. Compared to other countries, the Communist Party of China seems primarily concerned with staying ahead of regulatory control over crypto, even if they recognize the value of the underlying technology.