07-09-2021, 09:30 AM
![[Image: 4251.jpg?width=1020&quality=85&auto=form...22eb465353]](https://i.guim.co.uk/img/media/782b71299d0d77d3dc6d0af14e29515b59b81049/0_283_4251_2551/master/4251.jpg?width=1020&quality=85&auto=format&fit=max&s=2241c07ed90c54c1b4c41822eb465353)
Few would dispute that China’s recent crackdown on cryptocurrency trading and mining has contributed to the recent plunge in the value of bitcoin and other cryptos.
But while the argument rages about whether the volatility of cryptos is a sign of fundamental weakness or merely a bump along the road, the initiatives coming out of Beijing are being seen by experts as a sign of China’s attempts to incubate its own fledgling e-currency and reboot the international financial system.
The People’s Bank of China aims to become the first major central bank to issue a central bank digital currency. While the PBOC’s counterparts in the west have taken a more cautious approach, it has held trials in several major cities including Shenzhen, Chengdu, Shanghai and Hangzhou.
The benefits of an e-currency are immense. As more and more transactions are made using a digital currency controlled centrally, the government gains more and more ability to monitor the economy and its people.
The rollout is also seen as part of Beijing’s push to weaken the power of the US dollar, and in turn that of the government in Washington. China believes that by internationalising the yuan it can reduce its dependence on the dollar-dominated global banking system, just as its Belt and Road Initiative is building an alternative network of international trade.
- More -