China has begun another comprehensive crackdown on crypto and one of the reasons may be because the authoritarian nation is preparing to use blockchain technology to create its own secure currency for the world called Digital Yuan. Digital Yuan is a cryptocurrency-like version of the Yuan Chinese currency that may eventually be backed with the creation of a blockchain service sanctioned by the state. The Chinese Communist Party have placed 19 bans of crypto over the last several years and began plans for a state-backed "Blockchain Services Network" or BSN for short. Digital Yuan under the name e-CNY has begun to become accepted in Chinese society. For example, Chinese e-commerce giant JD.com has begun accepting the currency as payment and some of the company's employees are being paid in the currency. As a company with over 310,000 employees and a customer base of 417 million users, JD's adoption of Digital Yuan is definitely a massive benefit for the Chinese government.
China is also hosting the Beijing Winter Olympics where Chinese authorities are going to try to promote the digital yuan. Plus, China has more than 120 nations as major trading partners which could accelerate the adoption of digital yuan. Like a lot of blockchain technology, the system backing up digital yuan may be overlooked by Chinese authorities, but it is decentralized enough that it doesn't require bank accounts and can work on local networks connected to blockchain nodes even if the internet is down.
China's actions not only seem to reduce the number of people who can access the crypto market, but also show an attempt at expanding its market and giving the Chinese Communist Party more control over its money.This Digital Yuan could also spread to the markets in Africa that could give China a larger economic foothold around the globe. How far can this new currency spread and could it help China gain technological dominance? Will it be able to overtake certain other forms of centralized currencies and help China try to push decentralized crypto out of its own economy? Guess only time will tell...
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