The explanation from the former president of China's central bank, the People's Bank of China (PBOC) may explain a little why the country is less fond of the crypto sector over the past few years.
According to Zhou Xiaochuan, the restrictions imposed on currency and cryptocurrency mining are a necessary action to save the economy in the long run - "survival of the fittest".
They believe a decentralized blockchain -based digital currency is not an appropriate payment method for traditional economies because this group of currencies has scalability, covering transaction costs/charges, network density, and transaction speed.
As a result, China is confident its economy will grow faster through the advantages of the central bank’s digital currency (CBDC): low transaction costs, convenience and high stability.
This proves the country’s confidence in the CBDC which is believed to offer high flexibility compared to traditional payment methods.
In fact, most businesses are also guaranteed to benefit from the digitalization of the economy and small enterprises have the opportunity to create a simpler and more effective accounting framework.
Perhaps other countries are more comfortable focusing on crypto technology or leveraging blockchain technology in implementing the use of digital currency into their economic systems, but China believes they are more ‘expert’ in introducing the best way than just relying on crypto.
