The Bank of China, wanting to be a pioneer, may soon introduce an official digital currency (flat currency), creating a new era in the digital economy. This is highly likely as Chinese society operates with almost no money.
The number of internet users in China exceeds 900 million with most of them using their mobile phone to access the internet.
At the same time, this mass of internet users in China has given rise to the advent and emergence of extraordinarily successful e-commerce platforms as well as online-to-offline (Ο2Ο) over the last decade, enabling unhindered purchases and multiple uses, including access to public transport.
Photo by the website www.currency.com
Many countries such as Sweden and Thailand are ready to issue their own (CBDC). Regulations favor the consolidation of cryptocurrencies. Monetary and regulatory authorities continue to provide clarity (please read the analysis entitled “The Crypto-Assets and their Regulatory Framework“).
Hong Kong is considering a framework for cryptocurrency trading, while the US recently approved stable digital currency trading. Banking institutions will have to adapt by reshaping their systems and operating costs accordingly.
The adjustment has already begun, and some banks are setting up cryptocurrency trading platforms, asset management and custody services respectively as well as cryptocurrency advisory and research departments.
Virtual currency transactions are expected to increase rapidly, given the surge in intra-group, intercompany, domestic, and cross-border transactions. China’s banking system is likely to be a pioneer and the first to provide generalized payments between B2B.
From the other side:
• Companies increase their holdings in cryptocurrencies as they have the potential to increase the value of their portfolio, hedge against inflation and support consumer markets.
• Stock exchanges prepare futures contracts and cryptocurrency derivatives.
• Acquisitions and mergers between cryptocurrency players are accelerating.
• Supervision and control by regulatory and regulatory authorities is increasing.
2021 will be a milestone year for China to operate experimentally for the mass adoption of digital money.
