According to the research by the People’s Bank Of China, the country needs to step up its initiatives in creating a government backed crypto coin. According to researchers, the development of US Dollar-linked currency will strengthen the role that stable coin will create in the overall global markets. However, they do acknowledge that creating a government backed crypto coin might have adverse effects in its existing fiat currency.
According to the notes made by the Chinese Central Bank research, any US dollar-linked stable coin will be recognized extensively and will go a long way in proving the overall applicability of currency in the economy. It will also help in exploring options to support the local institutions through a yuan-tied crypto currency. But this report also takes into account that will take time before the introduction of new government backed crypto assets have any impact on the economy.
People’s Bank Of China is not alone in the conclusion of this research. In fact, there are many others within the country who share this viewpoint or are in favor of creating a yuan-backed crypto asset. The founder of China’s OKCoin Exchange, Star Xu also shared this viewpoint in a recent write-up. He feels that the release of Yuan-based stable coin is an inevitability. According to him, OKCoin, USA will no doubt take part in the release of any stable coin launch with an appropriate regulatory framework.
This research and its findings are particularly interesting in the current economic environment where you see a host of global economies exploring options of regulated crypto currencies. Japan and India are two nations that have been exploring their own backed stable coins as well.
Despite these developments, Chinese government will only proceed with such a proposal if it can remain in full control over the economic ramifications of such action which goes against the “decentralization and autonomous” proposition of crypto related assets.