Seven in every ten countries are now studying ways for developing their own cryptocurrency due to the popularity of virtual money. China is one of the largest economies getting involved in this quest. Xinhua, the state-run news agency of China, stated that President Xi Jinping has previously mentioned why Blockchain is important in the next stage of technological innovation and industrial transformation of China. Take a look at YuanPay to find the best cryptocurrency to invest in now.
The official cryptocurrency of China is e-Yuan. The development of this cryptocurrency is attracting attention across the world. Investors would love to invest in the new currency because they hope it can arise to the levels Bitcoin achieved. However, it is still not clear how much e-Yuan China will include in their financial system. There are critics of e-Yuan claiming that it is not possible to completely decentralize the currency, which the state controls, from the government.
e-Yuan can offer a solution to one specific problem, which is the level of bad debt of China. The bad debt of China is currently at ￥2.4 trillion ($341 billion). The bad debt accumulated due to the illegal practice of using the same capital to guarantee multiple loans. J. Rothers, the senior blockchain researcher, believes that the best solution for the Chinese government is using the e-Yuan. Chinese government can use e-Yuan to track liabilities and assets to ensure it does not guarantee multiple loans with the same collateral.
The government of China will control how their cryptocurrency circulates and will allow only authorized brokers and banks to sell the cryptocurrency initially. It is not yet clear if the Chinese government will use physical assets to back up the currency.
Recently, the Chinese government acquired large quantities of gold for supporting its fiat currency, so it can mean they can provide the same support for stabilizing the e-Yuan’s price if the price starts to fall. This is the reason some investors want to invest in the new currency.
Once e-Yuan was announced, foreign investors invested over 26.99 Billion US Dollars in the Chinese tech stocks, leading to record heights in the Shenzhen stock exchange. It is good news for both the e-Yuan and the technology stock investors in China. Many investors now want to invest in stocks with high potential because of the stock market crash due to the recent pandemic. Most investors believe that e-Yuan has given them a big financial opportunity.
It may be possible for the e-Yuan to provide a solution to the bad debt issues of China. However, middle-class investors can use a secure investment strategy to climb up the financial ladder quickly. In case the e-Yuan perform like Bitcoin (in ten years, it went from $0.003 to $10,000), investors will have several opportunities in the new cryptocurrency of China.