2019 has been an exciting year for bitcoin and the entire cryptocurrency environment. What started out as an individualistic crusade has now gotten the attention of policymakers, governments, and banks. History will definitely record 2019 as the year digital currencies were recognized as assets. Despite the giant strides achieved by cryptos, lots of people still remain skeptical.
The first half of the year saw bitcoin soar to a record value of $12,970. Although this was still lower than the all-time high set in 2017, it was still an impressive turnaround. Most analysts believe that the price rise in 2019 was because of the Facebook Libra announcement.
Now, with Facebook’s Libra on the horizon, as well as the “digital yuan” (China’s answer to bitcoin), many feel that Bitcoin will be facing massive competition in the coming years.
“The digital yuan is not up for speculation, it is already happening,” said Mu Changchun, head of the PBOC’s digital currency research institute.
“It is dissimilar to bitcoin or altcoins given the fact that they require a form of support from a basket of currencies,” he added.
Reports from China suggest that the design and testing of the Chinese Digital Currency Electronic Payment are already complete. There are already strong indications that pilot tests would be carried out in the coming months.
The Fear Of The Digital Yuan
The news that China will soon launch a Digital Currency Electronic Payment system has been met with disapproval and disappointment. Some people have voiced their concerns regarding the news, while others are indifferent about the unveiling of the digital currency.
There is a growing concern among citizens that the digital yuan will serve as a means for the government to increase its control on citizens.
“News like this means privacy will be questioned in the new decade,” said Andy Mukherjee, an analyst from Financial news outlet Bloomberg.
Bitcoin price movement in 2109
“The digital yuan will be more significant than Bitcoin. It has everything backing it. As soon as it goes on offer in 2020, it will have the backing of the central bank of the world’s second-largest economy. What’s more, it will be able to draw value from China’s stance to place taxes on perpetuity,” Mukherjee said. “The arrival of a digital yuan will enable the state to become the only supplier of money to retail customers.”
Nevertheless, Mukherjee was quick to warn other nations of the change in the financial landscape in the coming years. He urged them to follow china’s stance, and that “anonymity decreases when cash disappears.”
As earlier mentioned, governments are starting to recognize bitcoin as a powerhouse. There are even talks of a European Central Bank Digital Currency in the pipelines.
However, the popularity and use of Bitcoin will only increase as more countries try to adopt and control their digital assets.