China is on the verge of becoming the biggest economy in the world. China is also one of the first countries in the world to launch its own Digital Currency.
But not a lot of people know about it. In this article, we are going to take a look at China’s Digital Currency. Since the launch of China’s Digital Currency, it has been creating a lot of buzz.
As you are reading this blog, there is a high possibility that you want to know a thing or two about the digital currency that China has recently launched.
If you want to trade in Cryptocurrencies, then you should have good trading software. Note that it is not decentralized like other cryptocurrencies; instead, it is backed by the Central Bank of China’s yuan deposits.
So wasting any further time, let us briefly look at the five important things you need to know about China’s Digital Currency.
5 Important Things You Need To Know About China’s Digital Currency:
Below are some of the important things you need to know about China’s Digital Currency
#1: Name Of China’s Digital Currency:
China’s Digital Currency is called Digital Currency Electronic Payment. It is the digital version of China’s national currency called the Yuan. You might be surprised to know that it has been under development for quite some time now.
The Government of China has made it mandatory to convert a significant part of the yuan reserves into digital currency and then have it distributed to citizens and businesses using mobile technology.
#2: Not Decentralised:
Another important thing that you must take note of is it is not decentralized, which is the ethos of all cryptocurrencies. Digital Currency Electronic Payments (DC/EP) are backed by China’s national currency, Yuan.
It is centralized, which means the Government has the power to regulate it, which also means that you are obliged to give an account of your spendings to the legal authority. It is widely used in China, and almost all eCommerce websites accept it.
#3: Differences From Other Cryptocurrencies:
One of the biggest differences between other major cryptocurrencies and China’s digital currency is their legality.
All Cryptocurrencies, including Bitcoins, are banned in China, whereas DC/EP is legal and is widely used. It is also used as a substitute for their national fiat currency, Yuan.
Another major difference between DC/EP and other Cryptocurrencies is that of anonymity. Cryptocurrencies are anonymous, whereas DC/EP is not; the Government of China has the authority to track it.
#4: Major Benefits:
There are tons of benefits from the perspective of the Chinese Government. Since DC/EP is decentralized, China can track the flow of money in a better way.
This enables better economic growth of the country, and it also helps to make better decisions on the Government’s part.
Cash is widely used in China, so this new digital currency is promoting digitization and technological developments. Another major benefit is that the new digital currency DC/EP will give a boost to the banking sector.
There is still a huge chunk of China’s population that does not have bank accounts. Digital currency will help a lot to bring those people into the mainstream economy.
#5: Backed By Reserves:
Since DC/EP is not centralized, China’s fiat currencies’ reserves back DC/EP. This also means that it is prone to inflation as more and more digital currencies are brought into circulation.
There you have it, above are the five most important things you need to know about China’s Digital Currency. I hope you have found this article and that it has given you some valuable insights into how popular DC/EP is.
If you have some questions or feedback that you want to let us know, then kindly post them in the comment section down below. Our team of experts will try to answer each one of them.