Japanese media speculates that China's official digital currency and Bitcoin attack and defense trends

When it comes to the digital currency "Bitcoin", many Japanese may think of the bankruptcy of the Bitcoin exchange "Mt. Gox" and the arrest of its operator, and the negative impression may be difficult to eliminate. However, Bitcoin's popularity in China is currently resurrecting, and the Chinese government's attitude is also attracting attention.

The first wave of enthusiasm ended in "tragedy"

According to data from Bitcoin China (BTCC), a major Chinese Bitcoin exchange, the Bitcoin to RMB exchange rate, which had previously been in the 1,000-2,000 yuan range, began to soar in October 2015. In early November, it reached 1 Bitcoin to 3,000 yuan, a 2.6-fold increase from the low point in August. It then continued to hover around the high point of 2,500 yuan. With October 2015 as a turning point, the transaction volume also increased significantly.

70% of the world's bitcoin transactions are considered to be traded against the Chinese yuan. In China, which is considered the center of the world market, bitcoin began to spread in 2013. In July of that year, the exchange rate of bitcoin against the Chinese yuan was still around 500 yuan per bitcoin, but it soared to nearly 7,600 yuan in November of the same year.

At the end of 2013, the People's Bank of China (PBOC) continued to introduce measures to strengthen supervision, and Bitcoin continued to fall, and the craze cooled down for a while.

Are the Chinese authorities trying to “fight poison with poison”?

In January 2016, the People's Bank of China issued a statement saying that it would step up discussions on issuing "digital currency". It pointed out that the People's Bank of China had set up a special research team in 2014, the second year after Bitcoin's popularity declined, and obtained cooperation from Citigroup and Deloitte, an international accounting firm, to discuss the feasibility of issuing digital currency. Regarding the significance of issuing digital currency, the People's Bank of China also emphasized that it can reduce the high cost of issuing and circulating traditional paper currency, improve the convenience and transparency of economic transaction activities, and reduce illegal and criminal activities such as money laundering and tax evasion.

Hong Hao, chief strategist of Bocom International, said in an interview with a Hong Kong newspaper that if digital currency is issued, it will be easier to control the flow of capital. The loophole of using Bitcoin for capital transfer can be blocked by digital currency managed by the authorities. It can be said to be an idea of ​​"fighting poison with poison".

Bitcoin, which fell after the People's Bank of China released the news, has since risen steadily. It can be said that the current impact on investors' psychology is very limited. It is not without precedent for the government to operate digital currency. The Ecuadorian government is operating digital currency. However, for China, whose economic scale is much larger than that of Ecuador, the impact of introducing digital currency is naturally not comparable. Therefore, it is necessary to pay attention to the direction of China's official-led digital currency and Bitcoin attack and defense in the future. Perhaps the situation will reverse.