There has been a relentless crackdown on digital currencies by the Chinese government in China since last year. The crackdown started with the People’s Bank of China, the apex bank of the country, cracking down on Initial Coin Offerings, or ICO’s, after calling them illegal. Soon after, domestic cryptocurrency exchanges operating in the country were forced to fold their operations.
The Chinese people have been closely following the PBOC’s actions to see whether there has been a change in stance, but for now, things do not look positive at all, with the bank revealing that their next target are Multi-Level Marketing schemes which make use of digital currencies.
On the other hand, the PBOC says that they are conducting researches into developing their own form of digital Renminbi. There have already been several indications that the apex bank is planning to create its own digital token backed by itself and the Chinese government.
The vice governor of the PBOC also says that all steps would be taken to ensure the total rectification of cryptocurrencies in the country while the bank would also invest in more research and development to boost the dream of their own digital currency.
Earlier, on 3rd April, the director general of finance of the People’s Bank of China, Sun Guofeng, stated the need to create their own PBOC backed digital currency as traditional fiat currency has a negative effect on the country’s interest rates as well as the economy.
The PBOC has already been involved in a number of experiments and projects related to blockchain and they believe that digital currencies would help them buck interest rates and also help them implement negative interest rate policies in their financial frameworks.
While the Chinese government still does not like cryptocurrencies at all and looks at them with a negative eye, it has allowed the underlying framework of cryptocurrencies, which is the blockchain, to be used for a number of experiments and research projects.
Many crypto analysts believe the crackdown of the PBOC on public and decentralized cryptocurrency networks is to set up a clear path for their own digital renminbi and to ensure no competition of their digital currency with other tokens.
The PBOC, has not revealed any plans or has made any discussions on how they would bring about more rectification and correction as well as vigilance towards cryptocurrencies in China. There have been unconfirmed reports about the PBOC keeping a watchful eye on exchanges that have moved out of China as well as the digital currency market in China.
