Russian media focuses on digital currency: China may be the first to "take the lead"

Russian media said that many experts believe that the Chinese government will take advantage of all the advantages of digital currency, but will also put it under state control.

According to a report by Russia's Sputnik News on January 25, the People's Bank of China issued a statement earlier that it would strive to launch a digital currency issued by the central bank as soon as possible. The People's Bank of China emphasized that a group of experts are currently studying the possibility of issuing digital currency, including learning from the experience of foreign banks issuing digital currency and China's local use of digital currency.

Grigory Beglayan, a partner at Swiss consulting firm Medelle SA, believes that China is trying to adopt the concept of Bitcoin, but at the national level. China is aware of the many advantages of Bitcoin. First, Internet e-commerce companies want to adopt digital currency. In addition, digital currency can also bring economic benefits because all transactions will be taxed. But the main disadvantage of Bitcoin is that it is not controlled by regulatory authorities.

According to reports, China ranks first in the world in Bitcoin transactions. According to data provided by bitcoincharts.com, 60% of exchange business was conducted on Chinese exchanges in August last year, while the index was as high as 80% in March last year. Beglayan said that the adoption of digital currency is mainly related to trying to fulfill a series of requirements for the renminbi to join the SDR currency basket and the free circulation of currency, while stopping illegal capital outflows.

Alexey Laevsky, general manager of enterprise security company Zecurion, said that other advantages of digital currency include no need to spend money to produce banknotes and coins. As the issuer of cryptocurrency, the state can track all transactions, just like tracking non-cash transactions. In addition, with the retained transaction history, it is easier for the state to provide corresponding evidence in the event of a dispute.

Garrick Hileman, an economic historian at the London School of Economics, said Tunisia and Ecuador have expressed interest in digital currencies. Still, no cryptocurrency is currently issued by a state. China could be the first to "pioneer."

As for the details of the operation of the Chinese system, Laevsky believes that the system may be closed. If it is open, it means completely breaking privacy, and it is quite difficult to promote digital currency in this case.

He said: "It is very likely that this system will be completely closed, or similar to other cryptocurrencies, the transaction list will be available to everyone anonymously and without the authorization of transaction participants." Garrick Hileman emphasized: "The Chinese government's actions will not necessarily have negative consequences for Bitcoin or other cryptocurrencies. On the contrary, news from China has increased the price of Bitcoin. Bitcoin and other digital currencies will find their place, such as micropayments for small transactions."