Analyst: China's central bank digital currency will not affect the crypto market in the long run

eToro analyst Nemo Qin believes that China’s central bank digital currency will not have an impact on the crypto market in the long run.

Qin said this is because the issuance of the digital yuan will be strictly controlled and cannot be obtained through mining or traded with existing cryptocurrencies, Coindesk reported.

He mentioned, “Unlike most crypto assets, this is a centralized digital currency issued by the government. So China’s central bank digital currency will not have a direct impact on the crypto asset market.”

Earlier, according to the Financial Times, a survey from the American Digital Chamber of Commerce showed that the Chinese central bank has applied for 84 patents for its central bank digital currency plan. These patents focus on designing protocols to control the issuance and supply of digital RMB, perform interbank settlements, and integrate with China's existing banking infrastructure.

Central bank digital currency has recently become a topic of focus for many countries and central banks. At a hearing in the U.S. Congress last week, Federal Reserve Chairman Jerome Powell said, "We are working on it, we have many projects underway, and we are working hard on it now." But he also mentioned that the Federal Reserve has not yet officially started to create or issue digital dollars.

Judy Shelton, one of US President Trump's latest nominees for the Federal Reserve, said that digitizing the dollar could help maintain the dollar's advantage in global trade, and the United States needs fintech innovation to stay ahead.

European Central Bank President Christine Lagarde said she hopes to assess whether central bank digital currencies can serve the public and support the ECB's goals.

Kozo Yamamoto, a senior member of the Liberal Democratic Party of Japan, also said that Japan should create its own digital yen in the next 2-3 years.

In response, Qin said, “We can expect more central banks to announce the development of their own crypto assets using blockchain technology.”

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AuthorLiang CHE

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