Official Chinese Currency Renminbi to Become Cryptocurrency, Expert Says

Donald Tapscott, executive chairman of the Blockchain Research Institute,  stated that the official Chinese currency, the renminbi (RMB), will become a cryptocurrency, in an interview with Bloomberg on April 17.

In the interview, Tapscott revealed that he had recently been at a meeting with the vice-chairman of the Communist Party in China, who recalled that President Xi Jinping thinks that blockchain is one of the most important technologies for the future of the country.

Speaking about the government’s ban on cryptocurrency exchanges, Tapscott outlined that China is considering to ban cryptocurrency mining as well, and added:

“It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”

When asked if decentralized exchanges can operate in China —  which has previously banned initial coin offerings (ICOs) — Tapscott said that they could, although the government has a serious stance towards curtailing digital currencies.

Tapscott suggested that decentralized exchanges will eventually dominate centralized ones thanks to their purported ability to transparency and identify “bad behavior.” All assets, including traditional ones like securities, will purportedly be on decentralized exchanges, said Tapscott.

Chinese authorities have long been discussing possible ban of cryptocurrency mining. The National Development and Reform Commission (NDRC) has reportedly included crypto mining as part of its draft for a revised list of industrial activities the agency intends to shut down because they “lacked safe production conditions, seriously wasted resources, polluted the environment,” among other issues.

However the country remains a major player in the bitcoin market, with most of the largest bitcoin mining pools controlled by local organizations. By mid-2018, crypto mining operator Bitmain reportedly operated as many as 11 mining farms in China, and hence would be largely affected by the NDRC’s reported plans.

As for blockchain, China is reportedly leading the world in the number of blockchain projects currently underway in the country. There are 263 blockchain-related projects in China, accounting for 25% of the global total.

Last month, a multi-year project called the “Implementation Plan for the Promotion of Transportation Infrastructure Development” was unveiled in Jiangsu Province. Per the plan, blockchain will be one of the technologies local authorities use in overhauling local transport infrastructure.