With a press release released yesterday, the Chinese central bank confirmed that work on its CBDC is proceeding smoothly; the launch of a digital yuan, expected this year, is one of the epochal events that will characterize 2020, together with bitcoin halving, and the community has been literally shuddering for months waiting for experimentation in some cities to end, the new currency leaves the test phase and is officially issued.
The project, which China has been working on for at least five years, got underway at the end of 2019 with the start of the first pilot projects which, if they were successful, will lead to the official launch of the new currency.
In the meantime, all the major analysts are wondering about the effect that the launch of the Chinese CBDC will have on the bitcoin price; the assumptions are different, many, for example, believe that a new legal tender digital currency will make the crypto-fiat exchange easier, thus generating a huge boost to the adoption of bitcoin in China, which would inevitably send the price skyrocketing.
On the other hand, many others are convinced that the launch of the Chinese CBDC will have no effect on the bitcoin price for the simple reason that it will not change the Chinese orientation towards crypto currencies such as BTC, which the government considers mere speculative assets .
For the rest, doubts still remain as to the nature of the new currency, since almost nothing is known about the technology with which the Chinese CBDC was created; the government, in any case, ensures that it is not its will to undermine the privacy of citizens and promises that the new currency can be used as cash, so in respect of the confidentiality of financial transactions, however, it is more than legitimate to have doubts about this.
The fears are that through the introduction of this new tool and, more generally, of blockchain technology in society, the Chinese government will take advantage of the opportunity to further tighten the grip of mass control; if this happens, however, it is easy to imagine that the interest of Chinese citizens in bitcoin could increase exponentially.
We can then imagine that when the new currency is issued the developers will take very little time to create a P2P cross-chain exchange system and this, if the Chinese CBDC did not provide adequate guarantees in terms of privacy, would almost inevitably end to encourage the adoption of BTC.
It is difficult at this moment to say what turn things will take, the feeling however is that we will find out very soon.