Bitcoin’s release a little over ten yeas ago was a relatively small event that’s had huge ramifications, with some of the world’s biggest companies and countries getting into cryptocurrencies.
The bitcoin price has soared over the last decade, climbing to highs of almost $20,000 per bitcoin in late 2017 before falling back sharply—but not before its massive bull run had caught the attention of many banks, retailers and tech companies.
Now, a senior official at China’s central bank has said it’s “almost ready” to issue its own sovereign digital currency, potentially bringing the idea of bitcoin, crypto, and digital currencies to China’s billions of people.
The bank’s potential bitcoin rival is “close to being out,” Mu Changchun, deputy director of the People’s Bank of China (PBOC) payments department, said at an event held by China Finance 40 Forum over the weekend but stopped short of giving an exact launch date, it was first reported by Bloomberg, a financial newswire.
However, Mu Changchun also said China’s digital currency would not solely rely on blockchain technology, as bitcoin and other cryptocurrencies do, due to fears it wouldn’t be able to handle China’s vast transaction volumes.
China’s PBOC has been looking into creating a bitcoin rival for the last five years, with other major central banks, including Sweden’s Riksbank, also seriously considering releasing a digital currency to begin replacing physical cash.
Mu Changchun added China’s digital currency will be issued by both the central bank and financial instutitons.
Last month, the state-owned Bank of China, the world’s fourth-biggest bank by assets, posted a pro-bitcoin infographic on its website, explaining the history of bitcoin and how cryptocurrencies work—shortly after bitcoin was legally recognized by a Chinese court, finding the cryptocurrency should be considered digital property.
“The Bank of China posted up an article about bitcoin,” Samson Mow, chief strategy officer of bitcoin and blockchain technology company Blockstream, said via Twitter, alongside a screenshot of the infographic.
“They explained how [bitcoin] works, why the price is going up, and why it’s valuable. Never thought I’d see that happen,” he added, describing it as “bullish.”
The bitcoin price has risen strongly so far in 2019 as bitcoin and cryptocurrency rumours swirled around some of the world’s biggest technology companies.
Social media giant Facebook, micro-blogging platform Twitter, and iPhone-maker Apple have all been looking into crypto and bitcoin, with Facebook planning to release its own digital currency, libra, some time next year if it can get the world’s financial regualtors onboard.
The release of China’s own cryptocurrency could give the same boost to bitcoin and cryptocurrency prices that Facebook’s libra plans have done.
Meanwhile, U.S. retail giant Walmart is also reportedly looking to develop its own cryptocurrency, with some speculating that the one-time world’s largest retailer could be looking to compete with Facebook’s beleaguered libra project—something that many believe to be behind bitcoin’s rally so far this year.
“It is without doubt that with the announcement of [Facebook’s] libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets,” Dave Chapman, executive director at BC Technology Group, told Bloomberg, adding the likes of libra and Walmart’s digital currency could “dramatically” disrupt finance and payments.
China’s PBOC has said libra and similar private digital currencies would come under its oversight, potentially limiting their takeup in the country.
China has so far had a rocky relationship with bitcoin and crypto, with Beijing cracking down on cryptocurrency trading by shutting down bitcoin exchanges and banning so-called initial coin offerings as a way for companies to raise funds in 2017.
However, bitcoin and cryptocurrency mining remains hugely popular in the country, with China home to more than half of the world’s bitcoin mining farms.