For a long time, China has been home to more than half the world’s bitcoin miners. Things, however, took a turn two months ago when the government called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as the “great mining migration” in China. This exodus is underway now with hundreds of Chinese miners pulling the plugs on their machines.

Truth be told, the move by the Chinese government didn’t come off as a surprise. It started in 2013 when China first moved to restrict its banks from using Bitcoin as currency, citing concerns about its inherently speculative nature which could threaten the country’s financial stability. Over the years, the government has grown even warier. Authorities put a stop to token sales in 2017 and pledged to continue to target crypto exchanges in 2019.

CHINA’S LUCRATIVE BITCOIN MINES RISK DERAILING CLIMATE GOALS

AFP | 8 April, 2021

In May this year, Beijing moved to effectively shut down all crypto mining operations in the country. In late June, the central bank also required payment firms and banks to shut down the accounts of individuals involved in crypto transactions. By July, half the world’s bitcoin miners have now gone dark,  and the ‘great mining migration’ in China is afoot.

What led to a migration of miners from China?

While the argument rages about whether the volatility of cryptocurrencies is a sign of its fundamental weakness or merely a bump along the road, the initiatives coming out of Beijing are being seen by experts as a sign of China’s attempts to incubate its own fledgling e-currency and reboot the international financial system.

When Chinese Vice Premier Liu He called for a “severe” crackdown on and punishment of “illegal securities activities,” including crypto mining and trading, it was to—as he put it—”stem risks and ensure financial stability”.  As it is, the Chinese miners helped raise Bitcoin’s value by more than 1,000 percent in a year to an all-time high of nearly $65,000 in April. After the Chinese miners began shutting down their machines, the value plummeted, closing out the first half of the year down almost 50% from its record.

Huobi, the world’s second-largest crypto exchange by volume, said in a statement on Sunday that it has suspended crypto-mining hosting services and the sale of crypto mining machines in China, according to Coindesk.  Even mine operator HashCow has indicated it will suspend new businesses in China and stop purchasing new mining rigs, according to a Reuters report.

Another crucial motivation is the increasing alarm in Beijing at the size of the crypto industry in China, where a huge amount of cryptocurrency was being “mined” until the recent crackdown. The threat of an unregulated alternative monetary system emerging from blockchain technology is a clear and present danger to the Communist party, according to observers.

It is perhaps important to note that Chinese miners account for 75% of the world’s Bitcoin hash rate—the total computational power used to mine and process crypto transactions—given the country’s access to specialized hardware and cheap electricity, according to new research published by Nature Communications.  

They are mostly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan, and Yunnan. Sichuan and Yunnan’s hydropower make them renewable energy meccas, while Xinjiang and Inner Mongolia are home to many of China’s coal plants. 

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In China’s latest attempt to clamp down on what was a burgeoning digital trading market,  Beijing has ordered a halt to foreign virtual currency trading in bank commercial savings and transactions products. China last week cracked down on privately mined cryptocurrency that led to the market price for Bitcoin to fall off a cliff.

Compared with a previous China ban in 2017, the new rules greatly expand the scope of prohibited services, after a new decision was made virtual currencies are not supported by any real value. Institutions, including banks and online payments channels, were told not to offer clients any service involving cryptocurrencies, such as registration, trading, clearing, and settlement. A State Council committee led by Vice Premier Liu He announced the efforts – the first time the council has targeted virtual currency mining, a big business in China that accounts for as much as 70% of the world’s crypto supply.

It has also thrown the full weight of the world’s second-largest economy behind the People’s Bank of China (PBOC) efforts to establish its Digital Currency/Electronic Payment system (DCEP) – otherwise known as the Digital Yuan. The Chinese government isn’t just worried about financial stability, either. A commentary piece in Xinhua News, the Communist Party’s official media outlet, elaborated on the government’s stance, voicing concerns about bitcoin’s role in money laundering, drug trafficking, and smuggling. It also mentioned bitcoin’s profligate energy use. Last week, China warned financial institutions not to participate in crypto-transactions or related services.

What are the new measures?

Three financial industry associations directed their members, which include banks and online payment firms, not to offer any crypto-related services including account openings, registration, trading, clearing, settlement, and insurance, reiterating the 2017 ban.

Posted by the People’s Bank of China (PBOC), the new ban also covers services that were not previously mentioned. It made clear that institutions must not accept virtual currencies, or use them as a means of payment and settlement. Nor can institutions provide exchange services between cryptocurrencies and the yuan or foreign currencies.

Additionally, institutions were prohibited from providing cryptocurrency saving, trust, or pledging services and issuing crypto-related financial products. And virtual currencies must not be used as investment targets by trust and fund products. Banks and payment companies were also urged to step up monitoring of money flows involved in cryptocurrency trading, and coordinate more closely in identifying such risks.

The impact of a cryptocurrency ban in China

CHINA’S LUCRATIVE BITCOIN MINES RISK DERAILING CLIMATE GOALS

AFP | 8 April, 2021

According to crypto wallet Ballet, founder and CEO Bobby Lee said this move could all be leading to a boiling point where China’s government actually takes stringent measures against the currency outright. However, he also outlined many of the infamous “bans” that the media has hit on over the years. It began in 2013 when the Chinese government recognized bitcoin as virtual property but banned it as a transaction medium. Since then, China has progressed to the point of regulators instituting trading restrictions and now, mining restrictions, Lee explained.

“China operates in a way where they rarely change the rules. Changing the rules can be very controversial. What they do is they change enforcement,” said Lee. “That’s why these verbal announcements are just a signal to the market, that they’re going to step up the enforcement again.” He continued to say that because bitcoin is a “free currency” it’s going to be “constantly at odds” with a capital-controlling society like China’s.

On the other hand, many Chinese bitcoin mines may consider moving out of China after the regulators re-emphasize plans to outlaw bitcoin-related payment services, although some mines in Southwest China’s Sichuan Province are still operating, as usual, industry insiders told the Global Times.

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Bitcoin and other cryptocurrencies are minted by solving puzzles using powerful computers that consume enormous amounts of electricity – much of it produced by coal plants. The Nature study found that if left unchecked, China’s bitcoin mines will generate 130.50 million metric tons of carbon emissions by 2024 – close to the annual greenhouse gas emissions from an entire country like Italy or oil-rich Saudi Arabia.

Chinese companies with access to cheap electricity and hardware handled 78.89% of global bitcoin blockchain operations as of April 2020, the study said. This involves minting new coins and keeping track of cryptocurrency transactions.

About 40% of China’s bitcoin mines are powered with coal, while the rest use renewables, the study said. But the coal-guzzling rigs are so large they could end up undermining Beijing’s pledge to peak carbon emissions before 2030 and become carbon neutral by 2060, it warned.

“The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort,” report co-author Wang Shouyang from the Chinese Academy of Sciences told AFP.

The government should focus on upgrading the power grid to ensure a stable supply from renewable sources, Wang said. “Since energy prices in clean-energy regions of China are lower than that in coal-powered regions… miners would then have more incentives to move to regions with clean energy.”

This year the crypto-mining industry is expected to use 0.6 percent of the world’s total electricity production, or more than the annual use of Norway, according to Cambridge University’s Bitcoin Electricity Consumption Index.

The price of a bitcoin has surged fivefold in the past year, reaching a record high of over $61,000 in March, and is now hovering just below the $60,000 mark. Given the profits available, Wang said imposing carbon taxes was not enough to deter miners.

China banned trading in cryptocurrencies in 2019 to prevent money laundering, but mining is permitted. Coal-rich regions are now pushing out bitcoin miners as they struggle to curb emissions. Last month, Inner Mongolia announced plans to end the power-hungry practice of cryptocurrency mining by the end of April after the region failed to meet annual energy consumption targets.

FIGHTING THE GROWING CRYPTOMINING THREAT IN SEA

Joe Devanesan | 29 September, 2020

The region accounted for eight percent of the computing power needed to run the global blockchain — a set of online ledgers to record bitcoin transactions. That is higher than the amount of computing power dedicated to blockchain in the United States.

Nasdaq-listed Bitmain, which operates one of the biggest cryptocurrency mining pools in the world, said they were shifting operations in Inner Mongolia to areas with more hydropower like Yunnan.

prw/apj/axn/reb

© Agence France-Presse

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Visa, the long-established card and traditional payments issuer and former staunch enemy of the burgeoning cryptocurrencies market, is now completing its turnaround into a Bitcoin supporter with the reveal of its plans to help banks roll out cryptocurrency buying and trading services with a Visa crypto software program, set to launch later this year.

Visa’s announcement comes after a year of institutional and other traditional investors finally coming aboard the crypto as a digital currency bandwagon, buoyed by bullish performances by Bitcoin and the crypto market as a whole towards the middle of 2020.

Not surprisingly, governments and players in the existing banking system are unwelcoming of payment networks that are “powered by users with no central authority or middlemen.” Many fear that cryptocurrencies like Bitcoin can be used to circumvent capital controls, and can be used for money laundering or illegal purchases.

But wide-scale adoption of crypto also has the potential to render certain traditional finance channels irrelevant, especially if the valuations in the volatile crypto market stabilize. Why would one store their funds in banks with hefty interest rates, for instance, if a stable crypto coin can store value for minimal charges, yet with the potential to gain even more?

That development, if it ever happens, is still far off on the horizon. But the interest from traditional financial services and investment groups to invest in the crypto market, along with calls to formally regulate the space, appear to be steps in a more fruitful direction.

Over the past year, hedge funds and various institutional investors have changed their tune about Bitcoin and the crypto market in general, now pouring in billions and sending the prices of certain coins skyrocketing. It is an attractive time to be a cryptocurrency trader once again after the initial market boom in 2017-2018, but Visa has actually been quietly working on its crypto software services for some time.

The credit card firm has been partnering with 35 various bitcoin and cryptocurrency platforms in recent years, and the company is finally ready to roll out Bitcoin and cryptocurrency buying and trading services that are intended to help banks, the traditional bastion of finance, ease into onboarding crypto transactions and trades.

A US bank in Kansas will be the first to pilot the Visa APIs, which will help the card issuer’s bank clients integrate Bitcoin and certain other cryptocurrencies. It’s understood banks will be able to allow their users to withdraw and self-custody their crypto holdings, a departure from Visa rival PayPal, which also joined the crypto acceptance train late but drew criticism for preventing people from moving their holdings off its platform.

WHAT IS STALLING THE CRYPTOCURRENCY INDUSTRY IN ASIA?

Tech Wire Asia | 4 January, 2019

The price of Bitcoin and other notable cryptos like Ethereum have surged of late thanks to the support of institutional investors and PayPal, drawing global attention once again. But Bitcoin’s growing popularity among investors as a speculative asset and a hedge against inflation has reduced its perceived utility as an alternative payment method.

“We see crypto assets as more like digital gold,” Visa’s head of crypto, Cuy Sheffield, told Forbes over the phone. “There’s less demand to spend Bitcoin.”

His comments on “digital gold” echo those of Visa chief executive Al Kelly, indicating the card company as a whole view Bitcoin and possibly all crypto assets more for their function as a store of value, rather than as a form of payment.

Kelly also pointed out that digital currency exchanges and platforms like Crypto.com, BlockFi, and BitPanda have begun issuing Visa cards, telling a Q1 2021 earnings call that “Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally.”

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The worldwide cryptocurrency markets were sent into flurries of trading activity again in the past couple of weeks, as Bitcoin once again approached the mythical US$20,000 mark for one Bitcoin. The steady climb to this point from US$10,000 per Bitcoin has taken less than three months this time, once again drawing an intense level of scrutiny not just from the public, but from regulators as well.

Since the time Bitcoin came to truly global prominence in 2017, however, the cryptocurrency industry has done a lot of growing up. And in many countries, that means regulation. In recent years, numerous serious cybersecurity breaches have been widely reported on, with hackers infiltrating crypto exchanges, stealing millions of dollars’ worth of virtual currency. Recent research conducted by TIE shows that 75% of cryptocurrency exchanges are reporting dubious volumes.

In the Asia Pacific (APAC) region, a hotbed for cryptocurrency trading, the region’s financial hubs Singapore and Hong Kong have introduced new licensing laws with a prerequisite to obtaining regulatory approval before trading is allowed.

The requirements will include an evaluation of the exchange monitoring technologies being used, including market surveillance for the detection of market abuse behavior, in addition to Know Your Client (KYC), Anti-Money Laundering (AML), and Combating the Financing of Terrorism (CFT) screening solutions that are typical for the onboarding of institutional clients.

Cryptocurrency exchanges need to implement robust control systems to detect, prevent, and report market abuse behavior and financial crime, to offset allegations that crypto markets can be misappropriated for criminal activities, as they are mostly decentralized and deregulated.

In Hong Kong, the Securities & Futures Commission (SFC) treats cryptocurrency assets no different than any other regulated security asset, so crypto exchanges looking to launch a trading venue in HK are subject to the new licensing laws and combined with restrictions limiting trading to institutional clients only.

Almost exactly the same is the situation in Singapore, where the Monetary Authority of Singapore (MAS) issued guidelines stating that Initial Coin Offerings (ICO) basically resemble capital market products like securities, and will be regulated under the Securities and Futures Act. Crypto platforms here are also subject to a licensing regime and are limited to serving accredited investors only.

The financial hubs are not the only ones looking to establish guidelines to protect investors. Japan’s Financial Services Agency (FSA) used to permit its crypto industry to operate on a self-regulating basis, but a 2018 cyber-breach at Coincheck, one of Japan’s largest cryptocurrency exchanges, of a record US$530 million caused the FSA to tighten its regulations on crypto exchanges and to introduce new screening requirements, including a new licensing obligation.

WHAT IS STALLING THE CRYPTOCURRENCY INDUSTRY IN ASIA?

Tech Wire Asia | 4 January, 2019

In the 2017 heyday of crypto trading, the Chinese cryptocurrency market accounted for 90% of all crypto trading in the market, but in September 2017, China outlawed ICOs as a means of unauthorized and illegal funding, while crackdowns on crypto trading resulted in the closure of 88 cryptocurrency exchange platforms and the closure of 85 ICOs. This motivated Hong Kong and Singapore to respond to growing investor demand, resulting in an explosive growth of new crypto exchanges.

It appears that the regulatory decision in China to outlaw crypto trading pushed other governments in the APAC region to implement regulatory frameworks to oversee the trading of these new asset types, including new licensing rules to regulate cryptocurrency trading and encourage liquidity.

It will be interesting to see if the forward momentum in Asia can be replicated in Europe and the US, where cryptocurrency regulation has been slower-moving but has shown the potential to be implemented.

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Cryptocurrencies aren’t just the reserve of obsessed Hodlers, they have substantial advantages over traditional currencies. They are decentralized, private, and secure, and transactions can be a lot faster than those of traditional government-issued fiat currencies, available to use from anywhere at any time.

So far, however, regulation (or a lack of it) has stymied mainstream uptake. Not surprisingly, governments and players in the existing banking system are unwelcoming of payment networks that are “powered by users with no central authority or middlemen.” Many fear that cryptocurrencies like Bitcoin can be used to circumvent capital controls, and can be used for money laundering or illegal purchases. Others are concerned over decentralized currencies’ potential to destabilize or undermine the authority or control of central banks.

Last week, the European Union announced a major step to regulating cryptocurrency assets within the bloc, which could break this deadlock and lay the groundwork for the wider uptake of the advantages of cryptocurrency by individuals and businesses, while protecting financial markets.

Considered one of the most comprehensive to be announced anywhere, the proposal from the European Commission includes aims to regulate supposed ‘stablecoins’, such as Facebook Inc.’s Libra.

“We should embrace the digital transformation proactively while mitigating any potential risks,” said executive vice president of the European Commission, Valdis Dombrovskis.

“An innovative digital single market for finance will benefit Europeans and will be key to Europe’s economic recovery by offering better financial products for consumers and opening up new funding channels for companies.”

Under the newly proposed rules, trading platforms would need a physical presence in the EU and would become subject to capital requirements. The most important stablecoins would also be supervised by the European Banking Authority.

Following the reveal, the proposal is up for debate between the European Parliament and national governments before it becomes law. The commission has said it plans to have a framework for crypto assets in place by 2024.

Set of GPUs used for mining cryptocurrencies. Source: Shutterstock

Benefits for business

Many businesses are already utilizing crypto to raise funds, make transactions, and make investments. The most recent announcement by the EU will in effect contribute to ‘legitimizing’ cryptocurrency for businesses, which could stir up renewed interest. Thanks to outdated systems, bureaucracy, cross-border monetary restrictions, and little financial impetus to change the status quo, authorities and financial institutions are known to move notoriously slow when it comes to technical innovations.

Before institutions can actively embrace and promote a product, they need to understand the financial landscape in which a new asset class operates, as well as the risk factors associated with it.

A common concern for banks is if they were to sell Bitcoin to a client and it’s then traced back to an exchange hack or terrorism, it could open itself up to criminal investigations or class-action lawsuits that could ultimately cause the bank to fail. Following the aftermath of the banking crisis in 2008, meanwhile, financial institutions have traditionally been averse to taking any unnecessary risk or stepping into any kind of gray area.

Raising funds

A key benefit for businesses is the ability to raise funds by releasing their own coins to generate money from the blockchain network. A small business could issue a coin to fund an upcoming product, with early access to that product being the value behind a coin. The same approach could also be used to fund a small business without having to sacrifice ownership of the business.

Accurate valuations

Steady value has made cryptocurrency ideal for transactions. Despite market uncertainty, cryptocurrencies have held their value well and have little to no transaction fees. Bitcoin remains the most popular on the market, which is then followed by Ethereum (ETH) and XRP.

A regulated marketplace will help put an accurate valuation on a cryptocurrency’s worth. This will create a more level playing field for investors by putting real identities that can be tied to illicit behavior by authorities. This will also create a bigger investor pool and provide stability by providing liquidity, which in turn will have a knock-on effect of reducing volatility in favor of reliable long-term price predictability. This allows for more organic growth, with investors able to determine the underlying value of virtual assets more accurately.

Encourages investment

A regulated cryptocurrency could mean an expected influx of financial institutions into the entire industry. Financial institutions will hope to bring some of the most-skilled professionals in the world in the fields of banking, FinTech, and digital security, as well as mature, tested enterprise-ready solutions and infrastructure.

For small businesses, this opens new doors to diversify their investments. The yield offered by cryptocurrency is still relatively high when compared to other investment instruments. A relatively young coin like Chainlink can gain more than 2% in value, while Bitcoin fluctuates at a rate of 2-3% per day.

Due to there being hundreds of coins to choose from, there are plenty of opportunities to bank profits with certain cryptocurrency investments.

Digital marketing

A regulated market ultimately opens new doors for other industries, and in the realm of digital marketing, this might not be truer. Branded coins are not just attracting potential investors but generate plenty of hype within the community.

The crypto community is nowadays one of the largest communities you can find online and has become a lucrative audience segment for many digital marketing campaigns.

The future of cryptocurrency still hangs in the balance, however, to achieve mass adoption while protecting financial markets, regulation is essential.

Financial institutions and mainstream investors seek order in a controlled environment in which to conduct business. Regulation shouldn’t spell the end but rather the beginning of the crypto industry.

The post Could an EU-ruling clear ‘ground rules’ for crypto? appeared first on Tech Wire Asia.

Cryptomining is becoming an ever-greater risk to small and medium businesses (SMBs) in Southeast Asia, according to new research from Kaspersky.

The global cybersecurity firm revealed that it had blocked in excess of 1.7 million mining malware attempts targeting SMBs in the first half of 2020.

In the last five years or so, since blockchain-based cryptocurrency trading began to rise in popularity, ‘mining’ cryptocurrencies has rocketed too. Cryptomining can have tangential profit gains for miners, but it requires a huge amount of processing power to mine constantly, that’s why so many cyberattacks are looking to piggyback on computing power belonging to other organizations.

What does cryptomining do exactly?

These intrusions attempt to surreptitiously make use of an organizations’ on-premise or cloud-based servers to mine for cryptocurrencies. Bad actors monetize cryptomining and illicitly leverage the server space and raw processing power of these companies’ servers without their knowledge or consent.

This phenomenon is also known as cryptojacking, and despite a slight decrease year-on-year, Kaspersky detected 1,726,799 cryptomining attempts within six months that are explicitly targeting SMBs in the SEA territories this year.

Mining detections were the highest cybersecurity threat for SMBs in the region, more so than the well-known vulnerabilities like phishing and ransomware.

Kasperky’s data shows that when it comes to cryptomining, four out of the six SEA countries surveyed are in the top 15 worldwide. It is thought that cryptomining slips under the radar more readily because companies are not as aware to be on the lookout for it.

“This threat is clearly not as popular as phishing and ransomware primarily because its presence is usually unannounced,” said Kaspersky general manager for SEA, Yeo Siang Tiong.

Globally, Kaspersky ranks Russia is the country with the most number of cryptomining prevented incidents in Q2 of 2020, followed by China, India, Indonesia, and Vietnam. But when it comes to cryptojacking detections among SMBs in the first half of 2020, Indonesia came out with the highest figure – and this despite a detection reduction of 40% when compared to the first half of 2019, Kaspersky says.

Cryptomining does not cause active disruptions or expose the firm to financial risk, so that could be why SMBs are less wary of it. But this doesn’t mean that mining malware is benign, as miners keep all the profits by leeching off other people’s systems, and don’t even bear electricity or equipment costs.

Due to its consumption of the system, cryptomining malware can overwhelm an operating system, and cause severe performance issues, which could then adversely (and rapidly) effect the businesses’ network and customers.

Criminals might also be using hacked servers as a means for illegally farming funds to be used for other nefarious purposes, such as exfiltrating valuable data, selling server access for further abuse, or preparing for a targeted ransomware attack.

“This threat is silent, hidden inside our devices and networks, slowly sucking our bandwidth, electricity, and damaging our hardware which are all costly at a time when SMBs need their cash flow the most,” stated Kasperky’s Yeo.

What SMBs can do

Cloud servers, in particular, are favorite targets to compromise, as they generally might lack the cyber protection of their on-premise counterparts. But Kaspersky points out some of the red flags that could indicate cryptomining running in the background of your systems.

CRYPTOJACKING EXPLAINED AND SOLVED

Tech Wire Asia | 6 February, 2018

Some of the flags include a sudden and substantial increase in electrical consumption; a slowdown in CPU system responses; wasted bandwidth that decreases the speed and efficiency of legitimate computing workloads; batteries running down much faster than before; devices running hot; and if the device uses a data plan, the data usage increasing.

CISOs need to ensure that staff is brought up to on newer cybersecurity challenges like mining, that they are keeping an eye on server loads, are frequently monitoring web traffic of mining queries on popular cryptomining pools, and are carrying out regular audits of the company’s networks, both on-premise and in the cloud.

Naturally, all cybersecurity and software applications should be updated to their latest versions, in case of vulnerabilities in outdated systems. Kaspersky also recommends that SMBs use a well-equipped, dedicated endpoint security solution with web and application control, anomaly control, and exploit prevention components that monitors and block suspicious activity on the corporate network.

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The relevance of physical currency is fast losing steam across the planet, and while there are plenty of alternative methods of payment, the emergence of central bank digital currencies could oust cash for good. 

Not quite the same as cryptocurrencies and lacking their anti-establishment edge, central bank digital currencies (CBDCs) are fast being considered by governments as the payments landscape evolves to meet the demands of younger smartphone-first users, advanced digital payment systems, and the rise of e-commerce. 

“If anyone can successfully launch a digital currency, at scale, it is China,” IDC Senior Research Manager Michael Yeo previously told Tech Wire Asia. And half a year later, the country certainly seems to be at the head of the pack when it comes to realizing a digital currency, a project it calls Digital Currency Electronic Payment (DCEP), or ‘Digital Yuan’. 

The People’s Bank of China (PBoC) has entered into a strategic partnership with homegrown ride-hailing giant Didi Chuxing – the world’s second-highest-valued unicorn startup, with plans to bring the digital yuan to the firm’s large-scale transportation network, which Didi calls “the world’s largest one-stop on-demand transportation platform.”

“Under PBOC’s overall DCEP strategy and operation timeline, DiDi’s DCEP taskforce will design and implement pilot DCEP projects in accordance with rigorous safety, security and governance standards,” a statement read.

Valued at US$56 billion, and backed by Apple, Tencent and Alibaba, DiDi is the world’s second-highest-valued unicorn startup, according to CB Insights. Called the ‘Uber of China’, the ride-sharing firm claims to have 550 million users across Asia, Latin America and Australia. 

Didi is certainly the forward-thinking and fiercely ambitious kind of company the PBoC would want to take the Digital Yuan forward. Off the back of a US$500 million funding round led by Softbank in May, the company recently gave itself the target to operate more than one million driverless taxis by 2030. 

While there is still no launch date for China’s digital currency, development would appear to be coming to a conclusion. In June, Wang Zhongmin, the PBoC’s former vice-chair of the National Council for Social Security Fund, said backend architecture had been completed. 

Speaking to us in January, the IDC’s Yeo said of China’s digital currency: “We haven’t seen any implementation of a digital currency at this scale anywhere else. 

“Some of the functionalities such as offline payments that don’t require bank accounts are really something very new to the market and there will be huge interest from other markets to see how this pans out.

“There are significant potential benefits for institutions both in and outside of China to leverage the digital yuan for both cash replacement and for cross border currencies – reducing the manpower and time required for such transactions and saving billions of dollars globally – if their political and economic need aligns with China’s vision.

“If China made the digital currency the official currency for the initiative, maybe offered project (infrastructure) financing in its digital currency, or did something on these lines at all — it could catapult the digital currency into the spotlight. Instantaneously, internationally,” Yeo said. 

IS CAMBODIA INTRODUCING A BLOCKCHAIN-BASED DIGITAL CURRENCY?

Joe Devanesan | 1 July, 2020

The National Bank of Cambodia recently revealed the technical details of an upcoming blockchain-based payments system dubbed ‘Project Bakong’ this month and is seen as a high-tech relaunch of the Khmer Riel, which is the kingdom of Cambodia’s official currency but is significantly lesser used by the people in favor of the US dollar, according to the recently published whitepaper.

However, unlike the Digital Yuan, Project Bakong will be a closed system that will be backed by the nation’s banks and financial regulatory authorities and won’t be a natively-digital currency.

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