China has taken a hard stance against cryptocurrencies in recent years, banning initial coin offerings (ICOs) and exchanges in 2017. However, there have been some recent signs that the country may be warming up to the technology.

In April 2022, the People's Bank of China (PBOC) issued a notice saying that it would allow banks and payment institutions to provide services related to digital yuan, a central bank digital currency (CBDC). This was seen as a positive sign for the future of cryptocurrencies in China.

In May 2022, the PBOC also announced that it would be working with the Shanghai Free Trade Zone to develop a pilot program for the digital yuan. This program is expected to launch in the second half of 2022.

These developments suggest that China is taking a more cautious approach to cryptocurrencies, rather than outright banning them. It is possible that the country will eventually allow for the use of cryptocurrencies in certain limited circumstances, such as for cross-border payments.

However, it is also possible that China will continue to ban the use of cryptocurrencies altogether. Only time will tell how China's stance on cryptocurrencies will evolve in the future.

Here are some of the reasons why China may be warming up to cryptocurrencies:

Digital yuan: The PBOC is developing a digital yuan, which could be seen as a competitor to cryptocurrencies. However, the digital yuan could also be seen as a way to legitimize cryptocurrencies, as it would show that the government is open to the technology.

International pressure: China is facing increasing pressure from international governments to regulate cryptocurrencies. This could lead the country to adopt a more lenient stance on cryptocurrencies in order to avoid being isolated from the global financial system.

Economic growth: China is facing slowing economic growth, and cryptocurrencies could be seen as a way to boost economic activity. The government could encourage the use of cryptocurrencies for investment and spending, which could help to stimulate the economy.

Overall, it is too early to say whether China will fully embrace cryptocurrencies. However, the recent developments suggest that the country is at least open to the idea of using the technology.

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Key points

State employees in Changshu, a city in China's Jiangsu Province, will receive their salaries in digital yuan from May.

This move will extend to employees of government agencies, state-owned enterprises, and public institutions, including state-run schools, hospitals, and media outlets.

Digital yuan is China's CBDC project, also known as e-CNY, which is piloted in at least 26 provinces and cities.

The digital currency has been integrated into Alipay and Wechat Pay, China's two dominant third-party payment platforms, and can be used for payment on at least 105 mobile applications.

Changshu was among the first piloting areas of digital yuan and started to issue digital yuan subsidies to state employees in October 2022.

Taicang, another country-level city under Suzhou, started to pay public institution employees' wages in digital yuan in June 2022.

Shenzhen saw over 28 million digital yuan wallets established by the end of 2022 and gave out more than 570 million yuan (US$82.58 million) worth of digital yuan in consumer subsidies in 2022.

Digital yuan in circulation totaled 13.61 billion yuan (US$2 billion) by the end of 2022, representing around 0.13% of the Chinese yuan at the time.

Response to Shenzhen's attempt to promote the CBDC to visitors from Hong Kong in March was less enthusiastic than expected.

According to a report by People’s Daily, the official publication of the Communist Party, state employees in Changshu, a city in Jiangsu Province, China, will begin receiving their salaries in digital yuan from May. The move extends to workers in government agencies, state-owned enterprises, and public institutions, including schools, hospitals, and media outlets.

Digital yuan, also referred to as e-CNY, is China’s central bank digital currency project and is currently being piloted in over 26 provinces and cities. The digital currency has already been integrated into China's two primary third-party payment platforms, Alipay and Wechat Pay. It can be used for payment in more than 105 mobile applications, providing services such as online shopping, and purchasing gasoline and natural gas.

Changshu, a county-level city in Suzhou, the provincial capital of Jiangsu Province, was among the first to pilot the digital yuan project. The city started issuing digital yuan subsidies to state employees in October 2022. Taicang, another county-level city under Suzhou, also started paying public institution employees’ wages in digital yuan in June 2022.

China's government has implemented various initiatives to promote the use of digital yuan. Shenzhen, a southern metropolis with a population of over 17 million, had more than 28 million digital yuan wallets established by the end of 2022, and gave out over 570 million yuan (US$82.58 million) worth of digital yuan in consumer subsidies in 2022, according to a local media report.

However, there is still a long way to go before digital yuan sees widespread adoption in China. The total circulation of digital yuan was only 13.61 billion yuan (US$2 billion) by the end of 2022, representing approximately 0.13% of the Chinese yuan at that time, according to a report by People's Daily in January. Moreover, the response to Shenzhen's attempt to promote digital yuan to visitors from Hong Kong in March was less enthusiastic than expected.

#yuan #china #dyor #BTC #digitalcurrency

Source: forkast.news

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Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

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