The Reason Why China Is Investing In Blockchain Technology
China is one of the leading nations when we talk about crypto and blockchain technology, and the country has various purposes why it funds in these technologies.
China President Xi Jinping has asked the people to take benefit of blockchain. While the officials at the Chinese Communist Party (CCP) understand that blockchain is accessible technology, although its applications are restricted, they can redirect it toward their aims.
The country can utilize a blockchain-based title system to resolve a significant problem in lending. At the instant, the borrowers can reuse the same collateral, and it would not be recognized until they begin to default, and more than one lender strives to grab the same property.
According to Celine Chen of Plug and Play, conventional banking has become out-of-date. The automated, decentralized system provided by blockchain lending can decrease operational risks and speed up the loan process. It can also assist lending firms in avoiding a financial crisis. Overall, blockchain offers “trust, reliability, and confidence to the complex lending process.”
Also, if China aspires to de-dollarize its economy, it would spark fear, not to discuss, getting relieved of dollars can be costly and inconvenient. Nevertheless, it can utilize blockchain, a modern and decentralized system without triggering panic. Instead, using blockchain would give the idea of “openness and progress.”
China is set to begin its digital currency electronic payment (DCEP) this year. But, a new report proposes that it might be delayed due to coronavirus.
“The coronavirus outbreak has led to postponed work resumption in government institutions, including the People’s Bank of China (PBC). Policymakers and research staff involved in the DCEP project are no exception, which weighs on the development process,” a source close to the matter told Global Times.
Meantime, Bank of England chief cashier Sarah John urged the central banks to view digital currencies. She stated that banks must examine it before tech giants rule. Facebook is already preparing to launch its cryptocurrency named Libra.
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