China's central bank plans digital currency research institute, Bitcoin in danger

Golden Finance News - Recently, the central bank is intensively preparing for the establishment of a digital currency research institute, which is expected to be officially listed soon. It seems to be targeting traditional digital currencies represented by Bitcoin, but the reality is not the case. The digital currency that the central bank is preparing to issue this time is fundamentally different from traditional digital currencies.

The digital currency that the central bank is preparing to issue this time is fundamentally different from traditional digital currencies. Image source: Golden Finance

——The iteration object of the central bank's digital currency is paper currency, which is equivalent to the "digital" version of paper currency. It is also significantly different from the currently popular "electronic currency" such as credit cards, stored-value cards, and e-wallets. Electronic currency is only a payment activity based on electronic accounts, and must be matched by physical currency offline. The central bank's digital currency does not have an entity and uses blockchain or other encryption technologies to ensure its "uniqueness."

Bitcoin is a special form of currency. First, Bitcoin is a decentralized currency that is not issued by any organization. Second, Bitcoin currently has more capital attributes than currency attributes, and is often caught in price fluctuations caused by speculation. This makes its asset function and commodity function far greater than its currency function. In the field of Bitcoin, there are also many investment methods, such as the three major platforms for spot trading and Black Gold 100 for contract trading. These are attributes that the central bank's digital currency will not have.

——From the perspective of the central bank, issuing digital currency can reduce the high cost of issuing and circulating traditional paper currency, improve the convenience and transparency of economic transactions, reduce illegal and criminal activities such as money laundering and tax evasion, enhance the central bank's control over money supply and circulation, better support economic and social development, and help achieve inclusive finance, etc...

In short, there is no competitive relationship between the central bank's digital currency and Bitcoin, and the monetary properties of the two are very different. Instead of worrying about the future of Bitcoin, it is better to invest and make money and embrace the future.