The People’s Bank of China is charting the road map that will lead to the creation of a digital yuan. The move is going to establish the People’s Republic of China dominance in the global cryptocurrency race. Speaking on this development on Twitter Anthony Pompliano of Morgan Digital wrote:
“BREAKING: China has received internal approvals to create a central bank digital currency and has already started building it. Let the global arms race for digital currency supremacy begin.”
The Chinese central bank is, therefore, calling all market-oriented stakeholders to work together to develop the asset. The program has been given the nod by the State Council as reported Wang Xin, the PBOC Research Bureau head.
Will Tron and NEO Benefit?
Facebook’s stable coin Libra has been giving jitters to many world governments, China chief amongst them. The move to build a digital Yuan could help the Chinese government offset the disruption the dollar backed token will have on its economy. On Libra Wang Xin says, “We will keep a close eye on the new global digital currency.”
Crypto users have wondered what the effects of government-backed crypto will be on Tron and NEO. As it stands right now, Bitcoin seems to be cannibalizing the altcoins with its market dominance at over 60 percent. This means that most cash injected into the market, is flowing into BTC.
Max Keiser, an American broadcaster and unapologetic Bitcoin bull, told CNBC that the altcoins are falling out of the rally. The adoption of the Lighting and Segregated Witness protocols have made bitcoin more mainstream. More and more investors are, therefore utilizing the king of crypto as a store of value.
In the Chinese government crypto sponsored rankings, however, Bitcoin is relegated to 15th place. In contrast, EOS has been given the top spot, followed by Tron. Alibaba, one of the world’s largest retailers, has been bullish for NEO. The digital currency is a Chinese Ethereum clone in origin and receives a lot of homegrown support. Its co-founder Da Hongfei has announced a $100 million worth EcoBoost fund to enhance the NEO ecosystem.
A Digital Yuan Impactful
Tron, on the other hand, is an inherently scalable blockchain network, with deep connections to Alibaba as well. Its minimal decentralization has been its weak spot. Ethereum’s Vitalik Buterin has in the past, likened it to a pile of trash for selling speeds while running on seven nodes.
Tron, nevertheless, has been the apple of the Chinese government’s eye because it prefers projects keen on addressing scalability. The token is also as Chinese as crypto can get, thanks to Justin Sun’s efforts. A government-backed digital, therefore could adversely impact the fortunes of both TRX and NEO.
The government would have a more controllable project to shill to its populous crypto embracing population. The chink in the governments’ armor, however, would be its inability to onboard users to its centralized token.
China, however, has the WeChat network in place to kick off their operations. The Tencent’s social media platform also works as a digital payments network. With it, PBoC can challenge Libra and establish some domestic dominance.