China's central bank appears to have noticed a rise in its residents' interest rate against the digital yuan. The project is expected to help China participate in the digital rush by replacing a significant number of its fiat currencies with the digital Yuan.
The People's Bank of China credits the CBDC interest rate to Bitcoin
If China's digital currency becomes a success, part of the credit goes to Bitcoin, according to Wang Xin, director of the research bureau at the People's Bank of China. According to CNBC which translated his comments from Mandarin to English, Xin said: "On the one hand, this is linked to the fact that more and more central banks around the world are participating in the development of national digital currencies."
Xin revealed that the country's growing interest in the country's digital yuan could be a result of other countries introducing a national digital currency.
But Wang isn't giving all the credit to the world's most important digital currency. While the country's Bitcoin ban has remained in effect to this day, Xin says the spike and price of bitcoin may have affected interest rates.
"On the other hand, this (interest) could also be related to the sharp rise in the price of bitcoin." He revealed.
There is currently no official date for the launch of China's digital yuan, but the country intends to continue accelerating pilot projects that offer residents from different parts of the country the opportunity to test the currency in retail stores. As Xin added, "Next, we will move forward with the digital RMB pilot programs and accumulate more experience."
CBDC: a threat to Bitcoin?
Integrating a central bank digital currency has become popular with many countries that are essentially looking to go digital.
Since 2020, there has been an increase in activities aimed at accelerating the CBDC implementation process. Countries such as Japan, Sweden, Switzerland and the UK have started researching, testing and exploring CBDCs.
The Bahamas was the first to introduce a central bank digital currency called the "sand dollar". The Central Bank revealed that the digital dollar is intended to facilitate "inclusive access to regulated payments and other financial services".
CBDC integration has been a success for the Bahamas so far, as Mastercard recently partnered with the Central Bank to enable users to “convert digital currency into traditional Bahamian dollars and pay for goods and services wherever Mastercard is accepted in the Bahamas. islands and throughout the rest of the world ".
A fuss has been raised about possible competition between CBDC and independent digital currencies like Bitcoin. However, as Bitcoin offers a level of decentralization that common CBDCs lack, the pro-Bitcoin community is optimistic that these currencies will never surpass BTC.