The central bank’s legal digital currency is on the way. Once launched, will the existing digital currency disappear?

This week, the price of Bitcoin, one of the major digital currencies, has plummeted again. From Monday to Thursday, it fell for four consecutive days, with a total drop of more than $1,800 per coin for the whole week, a drop of more than 18%. In the first half of this year, Bitcoin once regained its glory, rising from more than $3,000 per coin to more than $13,000, an increase of nearly 3 times! But after entering the second half of the year, it suddenly lost its upward momentum. After this week's sharp drop, it returned to around $8,000 per coin.

The reason why Bitcoin has plummeted may have something to do with my country's central bank. Although my country has long banned Bitcoin trading, there are still many Bitcoin and other virtual currency traders in China, because Bitcoin often rises and falls, which is an opportunity for these speculators to make huge profits. In the face of the temptation of huge profits, there are always people who can't resist. Therefore, some policies of my country's central bank may affect the decision-making of domestic Bitcoin investors, thereby affecting the price of Bitcoin.

Recently, my country's central bank announced that it will launch a legal digital currency. There are even reports that the central bank's digital currency will be released soon. Although it has been denied by the central bank, the launch of my country's legal digital currency is unstoppable and it is estimated that it will not take much time. In the future, my country will definitely not be the only central bank to launch a digital currency. Central banks of more countries will definitely join in, which may be a fatal blow to digital currencies like Bitcoin.

Bitcoin and other digital currencies are touted mainly because they have the characteristics of "decentralization" and can circulate freely around the world without being regulated by the state. However, because of this, they have also become a thorn in the eyes of governments. Some time ago, Facebook, the world's largest social networking site, wanted to issue a digital currency that was willing to be regulated by financial institutions, which was strongly opposed by the US political circles. Not to mention these unregulated digital currencies, it is estimated that no government wants to see them "regularized".

It can be seen that the reason why the United States and other countries oppose the issuance or trading of these digital currencies is not only whether they are regulated or not, but more importantly, they are probably worried that the issuance of these digital currencies will deprive the country of its currency issuance rights. For a country, the right to issue currency cannot be lost and must not fall into the hands of a private enterprise. Therefore, as long as there is a country, digital currencies like Bitcoin have almost no chance of becoming legal tender. "Decentralization" is their greatest advantage, but also their greatest weakness.

If all central banks launch their own legal digital currencies in the future, where will these digital currencies stand? Without the recognition of the country, they cannot be circulated, and if a currency cannot be circulated, it is basically worthless. Therefore, with the emergence of the central bank's legal digital currency, the price of these unowned digital currencies may be doomed to plummet.

Of course, the rise of Bitcoin and other digital currencies from obscurity to popularity must have a certain market basis, and with the help of some stakeholders, it is not so easy to make them disappear completely. Only when people begin to realize that they are worthless will they forget about them and let them die on their own. (Xicai.com)