Chinese officials, according to financial analyst and Jefferies Global Head of Equity Strategy Christopher Wood, want no competition for their digital yuan. That is why they have recently imposed a ban on bitcoin and other cryptocurrencies.
China is more concerned with its CBDC than with its carbon footprint.
Christopher Wood, a well-known financial expert specializing in the Asian market, believes there is more to the tale behind China’s anti-crypto mining and trading attitude. According to him, the government do not care as much as they pretend about CO2 emissions and the environment. All they want to do is eliminate competition for their own digital yuan:
“Certainly, blockchain technology’s decentralized features, which appeal to libertarians who oppose fiat currencies as state monopolies, are diametrically opposed to China’s collectivist system. This is something that the People’s Republic of China is well aware of. This is unquestionably a lot more serious worry for Beijing than bitcoin mining’s carbon-intensive components.”
“China does not want any competition when it releases the digital RMB nationally, most likely in the fourth quarter of this year,” Wood said, predicting that the most populous country is extremely near to introducing the CBDC towards the end of 2021.
In comparison to China, the financial analyst expects the United States to be significantly more accommodating of cryptocurrencies. He pointed out that such restrictions are unlikely to be enacted in Western countries.
China’s Crypto War
The State Council of China’s Financial Stability and Development Committee reaffirmed the ban on Bitcoin mining and trade in late May. “This is the first time that the Chinese Government has openly suggested a blow to the mining industry,” a local journalist observed. Bitcoin’s currency value dropped by over $5,000 in less than an hour after the news.
The major digital asset’s fiat currency price took another hit last week when the Agricultural Bank of China imposed a restriction on crypto use. According to CryptoPotato, the country’s third-largest bank has barred its clients from dealing with bitcoin and other digital currencies.
The crypto community thought that the huge state-run bank’s anti-crypto attitude was heightened as a result of the impending digital yuan. It should come as no surprise that China’s third-largest bank is working on the e-yuan and has already conducted testing.