In an interview with Bloomberg Philip Gillespie, CEO of cryptocurrency liquidity provider B2C2 Japan, said Chinese authorities may be seeking to ban stablecoins that are tied to the dollar. The goal may be to strengthen the digital yuan.
Philip Gillespie: China will hit the stablecoin market
The digital yuan is currently undergoing advanced pilot testing at several locations across the country. The central bank is to issue it before the Olympic Games, which are to be held in Beijing in February 2022. Thus, there is less than a year left to complete the work.
Many experts say central banks are likely to start hitting the digital currency market as soon as they start issuing their CBDCs. For example, they can restrict availability to independent and decentralized cryptocurrencies and stablecoins by introducing stringent regulations.
Anyway, as early as 2017, China banned the exchange of yuan for cryptocurrencies. Despite this, trading in digital assets on the Chinese market continues to operate. Investors use Tether to buy Bitcoin and other digital currencies.
Philip Gillespie, CEO of cryptocurrency liquidity provider B2C2 Japan, believes that the above could provoke Beijing to hit the dollar-denominated stablecoin market. He said “once the digital yuan is rolled out, this will be one of the biggest threats to cryptocurrency.
Gillespie, a former member of the Goldman Sachs FX expert team, joined B2C2 in 2018. The UK-based company was acquired by the Japanese securities and cryptocurrency giant SBI last year.
China Will Destroy Bitcoin?
Is Gillespie right? It is likely that the issue of the digital yuan will likely cause the People’s Bank of China to attack anything that it may perceive as a threat to its currency. It is worth adding that this may, for example, lead to a bursting of the current bubble, but not entirely Bitcoin or Ethereum as projects. There may be problems with liquidity for several months.
Some analysts say the digital yuan may be a greater threat to, for example, Tencent’s Alipay and WeChat Pay, China’s top payment applications.