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Is China Wrecking Bitcoin in Preparation for its CBDC?

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There is a reason why China is one of the world’s superpowers; it is a massive nation and one that likes to have a lot of control. At the same time, Bitcoin is meant to be centralized control-resistant, but its relative size for a market means it probably stands no chance against China.

It is already widely known that China does not approve of Bitcoin and the bevy of other decentralized coins. It is fascinated by Blockchain, and even sees the benefit of the tokens that come from the technology, but the lack of control does not sit well with the country. 

With that being said, China is working hard to launch what will probably be considered the first Central Bank Digital Currency (CBDC). A lot has been made about China wanting to launch its own cryptocurrency, and it came back into the spotlight when Libra looked to be a competitor. 

Now, Libra has been all but quashed and no longer threatens to take any of China’s CBDC market, but Bitcoin still stands firmly in the People’s Republic’s way. 

The influence of China taking an interest in the ecosystem has also been witnessed as the price of Bitcoin soared over 40 percent in one day when the president of the country announced a concerted effort to develop Blockchain.

More so, there appeared to be a softening of opinion toward cryptocurrencies as Bitcoin miners flooded the hydroelectric-rich area of Sichuan and the desire to invest in Blockchain and crypto started sparking up again.

However, this excitement was short-lived and apparently preemptive because any sort of crypto softening was probably not correct. Upon rumors that the Chinese regulators had shut down the offices of Binance, the markets started to plunge. 

The Binance rumors were confirmed by the exchange to be false, but the damage was done. However, the fire behind all that smoke also had a lot of truth in it as it appears as if there has been a major crackdown on crypto again in the country. 

According to local reports, as many as 173 exchanges were shut down. This again has not helped Bitcoin regain any of its previously lost momentum. 

The question now stands if this is the direct work of China in order to open a bigger and better pathway to its CBDC with thoughts hovering on its imminent arrival. China may not be intentionally trying to damped Bitcoin globally, but it certainly is trying to keep on top of it locally. 

Yet, its sway and influence as a major nation on a nascent ecosystem cannot be denied, and perhaps the regulators know as much.

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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