High Demand Signals Official Interest
The reprint of the 200-page manual titled “Digital Currency: A Reader for Cadres” highlights the increasing interest among Chinese officials regarding digital currencies amidst a tangled web of regulations. Initially released in November, the book’s comprehensive nature, featuring 23 articles on digital currencies, has prompted a second printing just three months later. This swift approval indicates that the government is keen on ensuring its cadres are well-informed about this emerging field.
A Comprehensive Yet Familiar Collection
As Yinan Zhao, a Bloomberg journalist, points out, this manual is essentially a compilation of articles penned by officials and researchers. Zhao explains that the book serves more as a “one-stop shop” for officials to familiarize themselves with digital currencies rather than introducing groundbreaking concepts. The articles span from the fundamentals of digital currencies to their wider implications on global finance.
China’s Conflicting Stance on Cryptocurrencies
China’s approach to cryptocurrencies has historically been a rollercoaster of confusion. While the country has a reputation for its tough regulatory outlook—illustrated by the stringent bans on crypto exchanges and initial coin offerings put in place in 2017—the narrative has been anything but linear. In 2018, the government appeared to soften its stance with the release of a primer on blockchain technology, aiming to educate officials on the potential benefits while encouraging responsible growth.
Forced Control: The Emerging Narrative
Throughout this journey, the People’s Bank of China (PBoC) has vacillated between cautious acceptance and outright opposition, particularly towards decentralized cryptocurrencies. Since early 2018, the PBoC has recognized the inevitability of digital currencies but remains wary of the potential disruptions posed by alternatives like Bitcoin. This has led China to actively develop a state-controlled digital currency, initiating the project in 2019 under the guidance of former governor Zhou Xiaochuan, to safeguard control over monetary policy.
Blockchain Adoption vs. Permissionless Cryptocurrencies
The push for a central bank digital currency aligns with a broad trend of retaining authority over the blockchain ecosystem. Notably, in late 2019, Chairman Xi Jinping advocated for the embrace of blockchain technology while simultaneously distancing the government from permissionless cryptocurrencies. This makes it clear that while the Communist Party acknowledges the time is ripe for digital currency growth, it craves the reins tightly in hand.
The Path Ahead
This evolving landscape calls for close attention. As the Chinese government continues to moderate its approach toward digital currencies, how officials leverage resources like the cadre manual will likely shape future policies. Whether this handbook will propel a clearer regulatory roadmap or merely add to the already convoluted narrative will remain to be seen.
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