PBOC Researcher: China Should Start Its Own Sovereign Digital Currency "As Soon As Possible"

Tyler Durden's picture

The past two weeks have been quite a rollercoaster for bitcoin and other cryptocurrencies. In loose chronological order, we have seen:

In the process Bitcoin went from $4,200 to under $3,000 in just days... and then rocketed back to over $4,000 today as the influence of governments in determining the fate of cryptocurrencies was strongly questioned.

Meanwhile, as reported yesterday, first India announced it may issue its own bitcoin-like cryptocurrency as legal tender, and now, in a publication of the Chinese central bank, Huang Zhen, a researcher at Central University of Finance and Economics writes that the "the PBOC it should start its own sovereign digital currency as soon as possible" according to a commentary in the PBOC's own Financial News.

Here is the key excerpt, roughly translated:

In order for the Chinese government to prevent and control the risk of virtual currency, it decided to prohibit the issuance of ICO tokens, and stop the trading of cryptocurrencies and other virtual currencies on exchanges, to better protect the interests of China's financial consumers, and to prevent the spread of currency risk to China's financial system, safeguard China's financial security and the stability of important economic initiatives. The sovereign state is still the fundamental player in global politics, and carries with it the characteristics of the world financial system. Cryptocurrencies and other virtual currencies attempt to challenge the sovereign state's right to issue currency, requiring the nationalization of currency issuance. China has a clear understanding of digital forms of money, and is actively engaging in relevant work. The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money. After this round of virtual money markets supervision, we expect under the auspices of the Chinese central bank to launch our own sovereign digital currency as soon as possible to help maintain China's leadership in the development of global digital finance.

Translation: decentralized cryptocurrencies, in which the money creation process is no longer controlled by the state (as a reminder, cryptos are not a liability to any central bank and are thus not backed by any official government entity), are the enemy and deserve the scorn and condemnation of every spoke of the establishment, from the central banks' central bank, to commercial banks, to financial newspapers of record, all the way down to brown-nosing wannabe establishment "hanger-on" lackeys. Meanwhile, centralized digital currencies, which are controlled by the state, which can be adjusted and modified anywhere and at any time at a the flick of a switch, and which can be extinguished or multiplied at will during times of NIRP or hyperinflation, are wondrous creations, and China - for one - can't wait to launch one.

Or as the BIS explained, left bad, right good.

 

... or even simpler, the difference between Fedcoin and Bitcoin.

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4shzl's picture

Fox proposes to guard henhouse.

Pinto Currency's picture

Get yer Mao Bits here!

Special digital nothings.

NEKO's picture

I'm guessing Mao's bits would be yellow?

NEKO's picture

Just please don't call them currency manipulators...

Badsamm's picture

And why would anyone want one of those?

RumpleShitzkin's picture

Yeah. Maybe they have one laying around?

My nephew started one this weekend. He's 10. Got the whole school investing in it. Soon, everyone will have their own vanity crypto currency.

land_of_the_few's picture

Yes, then they will be like Geocities or MySpace or Bebo.

Young car thieves used to put videos of themselves on Bebo, convinced that no-one would ever track them down in real life, because they were Hip Yoots ;)

But good luck to him, that does show a certain amount of dogged craziness which may be useful later.

tmosley's picture

Yes, and everyone has their own set of monopoly money gathering dust in the closet as well. Doesn't make the dollar less valuable, nor would their destruction make it more valuable.

tmosley's picture

The Venn Diagrammer is back!

Yen Cross's picture

  Diluting the last vestiges of GAAP, and personal responsibility is the communist way.

Steelio's picture

LOL. We already have soverign digital currency, what we didn't have was decentralized digital currency.

RumpleShitzkin's picture

Not sure if sovereign is the right word.

Not sure what is, though.

DEMIZEN's picture

i am not even sure what IT is bond or cash? investment or currency?

land_of_the_few's picture

Sovereign is a great word, it is appropriately enough from Vulgar Latin "superanus".

tion's picture

They already started building it.  Will the shadow gold come out to play?  I had just started thinking they'd keep it in the closet for awhile yet, but any attempt at forecasting in this environment is just an exercise in futility.

Cluster_Frak's picture

I need to start my own digital currency whitemalecoin for white males only.

Implied Violins's picture

Why bother? All crypto-coins will ultimately end up burning down their own virtual neighborhoods.

At least RedNeck coiners will finally move out of those fucking trailers.

secretargentman's picture

Come on now... Whats wrong with trailers? Other than being tornado bait, that is...

Gorgeous's picture

"...the influence of governments in determining the fate of cryptocurrencies was strongly questioned"

No kidding.  They can outlaw conversion of crypto from/to legal tender, but they can't stop private use of the medium for transactions in goods and services, PMs...

Unless they arrest you for being in posession of a wallet.  Don't tell Gov. Moonbeam.  He would do it.

Oswald did it's picture

This is HUGE.  The first battle has begun.  The government a of a large nation has decided that crypto currency poses a large enough threat that something needs to be done about it.  They want it, and they want to control it.  This will be coming to the USA soon, although I expect in a slightly different form.  In the USA it will be corporate controlled (GoogleCoin), just like our government

DEMIZEN's picture

this will hurt euro and yen

LostandFound's picture

Possibly, but big players are now involved in Bitcoin, players that can lobby appropriately. The adoption curve continues with Bitcoin and it has a chance to become the global reserve currency. The crypto haters should invest a little bit, even if its just $20 because it increases the chances of this happening. 

Lets face it, we are in a race with the centralised system, its people vs the banks but its not what people imagined, they imagined ropes and lamp posts (that might still happen) instead this is being fought with a challenge to the system. 

katagorikal's picture

Ether is already the CorporateCoin of which you speak:

https://entethalliance.org/members/

Perhaps really JPMorganCoin.

I love your wife's picture

Bottom line:  If you hate central banks, buy Bitcoin.  If you hate Bitcoin, consider it a donation to the fight against central banks.

 

Buy Bitcoin.

moorewasthebestbond's picture

China?

 

"Shitting-on-the-side-of-the-road-Coin"

katagorikal's picture

No, that's an Indian cryptocurrency.

You have confused it with the Chinese:

"Spitting-on-the-side-of-the-road-Coin"

Exponere Mendaces's picture

Its slowly dawning on the short-bus commenters here on ZH that Bitcoin isn't going away.

If this motherfucker was going to trade to zero, China fucking with it would have done it.

Load up the fucking truck and laugh all the way to your private island.

See you past 5K, motherfuckers.

 

quasi_verbatim's picture

Chinkbit will be the first gold-backed crypto.

Davidduke2000's picture

for over 10 years some people talked about banning cash yet it did not happen. only idiots believe that countries would use digital currency other than the fiat money, yet the currency is being used digitally by credit cards and bank transfers. however creating more money out of thin air that will exist only in the computers in China where over 500 million people do not have a computer and do not know how a computer works is totally stupid even to suggest such a plan. 

tmosley's picture

Thing is, literally nobody cares about the rural peasants.

Father ¢hristmas's picture

Dump them T bonds and team up with the rest of the BRICS, along with Mexico, Venezuela, and the rest of Africa, to launch a  gold-backed supercryptocurrency.

Kill whitey.

Bonus Lightning Round: OPEC can launch a petrol-backed cryptocurrency.

danster82's picture

This would be viable if it was done right. A government could issue its own premined coin and hold say 30-50% in its treasury and then open the rest of the supply up for global mining / purchasing on forex. It then only needs to amend legal tender and tax laws to allow for the settlement of tax's in this coin and for government spending expenditures in this coin.

But of course it will not do anything of the like and create some psued crypto like coin that they control the supply of.

Thebighouse's picture

Bottom lline:

 

China is shit

a "controllled" economy......

That is bullshit.............

Fraud, lies......ok.....complete bullshit..............

Ok just like the US.......

It is alllllllllbulllllllllshittttttt !

 

bluerivercard's picture

JSECoin -

Business cases

1. Anybody can mine using their web browser

2. Competitor to Google adsense. Runs mining in background of visited sites instead of annoying adverts

Referred link

https://jsecoin.com/platform/?lander=1&utm_source=referral&utm_campaign=aff270&utm_content=


css1971's picture

Ladies. Gents.

Get out of the currency game unless you are explicitly trading currencies.

Turn bank credit to cash and get rid of the cash. It's the only way to isolate yourself from the coming problems. Minimise your exposure  to the financial sector. Then inflation or deflation you are not affected. You don't win but you don't lose either.

alphasammae's picture

China will miss out in the process as they did with apple, facebook, google, amazon etc. > always one step behind catching up through restrictions and discriminated regulation. Instead, they could create their own regulated secured crypto trading system that connects with all other systems and coins as BTC, BCH, Eth. etc and gain access to World platforms and enhance trading. Blocking and blocking is not the answer. Korea and Japan already have controls in place and continue to improve them so China should be able instead of blocking if they fell behind technology.

Greed is King's picture

China IS starting its own digital currency, the difference being that China`s digital currency will be underwritten by something that has a real and tangible value, Gold, whereas Western digital currencies (all of them) are underwritten by, well, nothing, zilch, diddly squat, pure fantasy. Pretty much like the stocks and shares values. Question: how can a company that is composed purely of a few computer servers and an advertising web site posing as a social network site whose intrinsic physical value is at most a million dollars be worth 7 billion on the stock market ?.

The_merovingian's picture

Why would I choose Fedcoins if I can has Bitcoins?

Utility Settlement coins will come first. In fact they already exist, it’s called Ripple.

Dinero electronico? The guy who made this is hilarious. Shows you how serious they are about the whole thing.