Chinese New Year (Lunar New Year) has a strong influence on cryptocurrency prices, with Bitcoin prices decreasing in the months leading up to the New Year. This article examines the trend and the possible reasons why it happens. Chinese New Year is celebrated on a different day each year as it is based on the Lunar Calendar.
This year, Chinese New Year will begin on 10 February and end on 13 February. During this time many Chinese Over-the-Counter (OTC) services will be closed – leading to high crypto volatility.
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*Data based on Bitcoin Prices on CoinGecko. Pre-CNY Highs taken as average candle price up to 7 days before the New Year.
This period is a public holiday in China, as many employees make the annual trip back to their hometowns to celebrate with their families. With a population of 1.386 billion, this represents the largest short-term migration in the world. During this time, I also came across some fascinating information about the best Plinko gambling sites, which offer unique and engaging gaming experiences for enthusiasts. All factories in China close during this period, with operations frozen for up to 2 weeks as logistics companies and suppliers slowly open up. Chinese New Year is also celebrated in other Asian countries such as Hong Kong, Singapore, and Korea (Korean New Year). China will also be rolling out a feature allowing people to send red packets containing its digital currency eCNY/DCEP. However, it’s important to note that during this time cryptocurrency exchanges will still operate and facilitate trading around the clock.
Chinese New Year Dump in 2019, 2020, 2021, 2022 and 2023?
Bitcoin prices would almost always drop in the weeks leading up to Chinese New Year.
For example, in 2019, Bitcoin prices dropped steadily from $3,491 right before the Chinese New Year to lows of $3,397 during the holiday.
In 2020, prices fell below the USD$8.3k resistance before Chinese New Year. There was a recovery back to USD$8.5k on the first day of the holidays. However, history cannot help but repeat itself, and within the same day plummeted back below USD$8.3k. Prices then remained stagnant and only made a marked recovery on the last day of the holidays.
In 2021, the tides seemed to have turned with a gradual increase from $32k to $39k in the first week of February, and a huge 2-day rally up to $48k in the few days leading up to the festival. However, during Chinese New Year, prices still began retracing to $46.2k. Fortunately, this did not wipe out the pre-Chinese New Year rally.
2021 Chinese New Year Bitcoin prices (Source: CoinGecko)
In 2022, prices took a sharp nosedive to sub USD$37 levels just before the holidays. Bitcoin prices then rose sharply towards a peak of over USD$39k midway through the Chinese New Year holidays. However, this euphoria was short-lived, and prices took a steep tumble to USD$36.5k on the last day of the Chinese New Year holidays. Essentially undoing the initial price rally a few days prior.
2022 Chinese New Year Bitcoin prices (Source: CoinGecko)
In 2023, prices pumped 1 day before the new year, ringing in a high of US$23,282.40 on the 1st day of Chinese New Year. Prices fluctuated between the US$22,500 and US$23,000 range during the duration of the holidays. However, ultimately closing at US$22,437.68.
Why do Bitcoin prices dump during Chinese New Year?
Decrease in Trading Volume?
Data compiled by CoinDesk Research shows the trading volumes on Binance, Huobi, and OKEx –the most popular cryptocurrency exchanges catering to Chinese customers – were down during the Chinese New Year period. A decrease in trading volume can also be seen during October each year when Golden Week (a 1-week celebration for National Day) in China takes place.
When large numbers of highly leveraged traders all bet on Bitcoin prices moving one way it creates an opportunity for other large investors (whales) to move prices in the other direction. Doing so triggers a cascade of liquidations, sending Bitcoin’s price into free fall and creating huge paper losses for leveraged long traders. The whales are then free to “buy the dip” at the expense of “rekt” traders.
Market Makers on Holiday
It is no secret that market makers and trading bots operate in the Cryptocurrency market – in fact, they are responsible for a portion of the market volume. Market makers located in China and other Asian countries will shut down operations for 3-5 days due to public holidays. Even though market making can be automated by trading bots and algorithms, it still requires humans to watch over the daily operation to make sure the is no malfunction.
During the Chinese New Year, market-making operations will be limited in capacity. This leads to more volatile and less liquid markets.
Cashing out for the New Year
Giving Red Packets filled with cash is a tradition
One of the possible reasons for the dip in Bitcoin prices is that people are “Cashing out” for the holidays. This is especially true in China because, during the festival, lucky packets packed with cash are traditionally given out to children and the elderly. These “red packets” are meant to symbolise luck and prosperity and is the only time when giving cash is not taboo in China.
Tradition dictates that married couples should give out red packets to young unmarried children, elderly and service personnel. Company Executives and managers should also give money to their subordinates – with some packets being filled to as much as the employee’s monthly wage.
Due to the huge amount of cash money required, some suspect that this tradition is responsible for the increase in Bitcoin Sell orders before Chinese New Year.
Chinese OTC Volume Drops
Bitcoin is traded in China via Over the Counter (OTC) desks. These OTC desks match orders from buyers and sellers and can offer escrow services. Top desks include Binance OTC and Huobi OTC.
Chinese New Year 2024 Bitcoin price predictions?
This year, Chinese analysts are already looking into the future and are optimistic for Bitcoin prices in the month after the Chinese New Year. They note that Bitcoin prices have generally gone up in the month after Chinese New Year. For example, in 2023, Bitcoin prices went up by 11.15% in the month after the new year, 13.9% increase in 2022, and 30.18%(!!) increase in 2021.
Prices have already been on the rise since 23rd January 2024 where prices were a at a low of US$38,678.18. Prices have been skyrocketing since 7th February 2024, and have crossed the US$46,000 on 9th February 2024! This was already predicted by some analysts on Weibo, saying that prices will not dip, and to welcome the bull market during Chinese New Year.
Crypto analysts have found that Bitcoin prices would almost always drop in the weeks leading up to the Chinese New Year. Hence in the weeks before and during the “Chinese New Year Dump”, traders expect huge volatility in crypto prices.
Why is there a Chinese New Year Bitcoin dump?
Chinese New Year marks the longest extended holiday in China. This period marks the world’s largest short-term migration as people return to their hometowns to visit family. People also cash out to send money back to their families and gift children “red packets”. Therefore, crypto prices dump during Chinese New Year as there is lower trading volume when everyone has “cashed out” their crypto or is busy celebrating.
When is Chinese New Year in 2024?
This year, Chinese New Year will begin on 10 February and end on 13 February.
Pi Jianlong, a member of the 14th National Committee of the Chinese People’s Political Consultative Conference and director of the Beijing Jindai Law Firm, is proposing “Online Virtual Property Protection Law” to accelerate the protection of network virtual property, as current conditions for special legislation have already become mature and the next generation of Internet and new digital economy require improvement in my country’s international competitiveness.
Accelerating Virtual Property Protection: Proposal from Pi Jianlong
With the tech-driven advances of the new digital age, China is taking the lead in the race to protect virtual property. Recently, Beijing announced that it will launch the National Blockchain Technology Innovation Center. This comes off of Chinese president Xi Jinping’s call for increased research and funding in blockchain technology, as well as ongoing efforts to develop a central bank digital currency (CBDC).
Pi Jianlong, a member of the 14th National Committee of the Chinese People’s Political Consultative Conference and director of the Beijing Jindai Law Firm, is set to submit the “Proposal on Accelerating the Protection of Network Virtual Property Protection” to the two sessions. This encourages the National People’s Congress to include a “Online Virtual Property Protection Law” in its legislative plans, as the current conditions for special legislation have matured and become ripe.
Jianlong believes that the next generation of Internet will be a value network, and blockchain, smart contracts, prophecy machines, Yuan universe, artificial intelligence and other technologies will aid virtual assets. As other countries and the European Union jump at the chance to develop virtual property, China is striving to increase its international competitiveness with proper regulations.
The Beijing Academy of Blockchain and Edge Computing (BABEC) runs the National Blockchain Technology Innovation Center and it is tasked to assist the nation’s technical innovation and achieve high-level technology self-reliance. With this center, the Chinese government plans to lead the development of important core technologies in the field of blockchain, leading to industrialization, talent cultivation and a national blockchain strategic technology force.
The latest blockchain technology application in China comes in the form of non-fungible tokens (NFTs). The Beijing Guoan Football Club recently unveiled its own collection of NFTs, a move mirrored by the local government’s plan to “Beijing Urban Sub-Center Metaverse Innovation and Development Action Plan (2022 -2024).” Meanwhile, the Beijing Municipal Administration for Market Regulation has put out calls to be aware of metaverse investment and NFTspeculation. In addition, authorities in the Hainan province hope to tackle the NFT market by educating the public on the risks and laws of the sector as well as combatting any fraudulent activity.
Finally, the People’s Bank of China has announced that it is working on new features for its ongoing CBDC pilot program, such as a QR code-based transaction system so that consumers can make the CBDC a more user-friendly cash.
Based on the reports, it is clear to see that the Xi administration takes these initiatives seriously and is pushing through reforms to ensure that the nation is prepared for the new digital age. The measures taken show China’s eagerness to be at the innovative forefront, and with the “Online Virtual Property Protection Law,” citizens in the nation can look forward to secure, high-quality virtual assets. (illustrarch.com)
Completing his leadership role at Alibaba Group, Kaife Zhang is being transferred to Web3 with speculation of it being linked to the unsatisfactory performance of his business developments, with his ‘Big Taobao Four,’ comprised of Pingchou, Blowing Snow, and Jialuo, that previously reported to Jiang Fan, to still remain unchanged.
Alibaba Group Re-Structures and Brings Kaifer Zhang to Lead Web3 Initiative
Alibaba Group, one of the world’s largest online marketplaces and a key player in the Chinese tech sector, has recently undergone an internal restructuring. As part of the reshuffle, the company has moved Kaifer Zhang, its vice president and General Manager of Global AliExpress, to lead its Web3 initiative.
Kaif has long been a leader in the Taobao Merchants and industries, and is part of a collective known as the “Big Taobao Four,” which includes Pingchou (Tang Xing), Blowing Snow (Yang Guang), and Jialuo (Liu Bo). Little has been revealed as to why Kaif is being transferred to this role. However, some have speculated that the restructuring may have been in the wake of an unsuccessful business venture.
The thing Alibaba Group is most well-known for is Jack Ma’s influence over the fintech giant Ant Group. As part of the group’s recent restructuring, Ma has given up control of Ant Group, leaving no one single shareholder in charge—instead, Hangzhou Junhan and Hangzhou Junao will now independently exercise their voting rights in Ant. The economic interests of all shareholders in Ant Group will not experience any changes as a result.
Many believe this change to the corporate structure will be beneficial to the company in the long-term. Wang Pengbo, a senior financial analyst at BoTong Analysys, is confident that the new company structure with improved voting rights is significantly more stable, and “paves the way for it to go public in future.” Since the announcement of Ma resigning control, shares of Ant-affiliated company Alibaba have jumped significantly, increasing by almost 10% on the New York Stock Exchange.
In 2020, Ant attempted to conduct the world’s largest initial public offering (IPO). However, the Chinese government took a negative stance and the plan was ultimately halted, though the company still seeks to stay abreast with the development of blockchain technology and digital assets. Ant has actively developed its blockchain business, AntChain, introducing new products in 2022.
Although Ant has demonstrated increasing interest in blockchain technology, the company has also adhered to the Chinese government’s negative stance on crypto. Many firms, including Ant, have imposed certain restrictions on their non-fungible token platforms for fear of a crackdown.
This is made all the more evident in court decisions, such as the one handed down to Xiao Yi, the former Communist Party secretary of the City of Fuzhou. He was charged with bribery and accepting over $18 million in illegal payments, as well as carrying out business transactions with Bitcoin miners from 2017-2021. As a result, China has implemented a blanket cryptocurrency mining ban, prohibiting miners from having access to electricity and capital markets.
In light of Chinese regulations, as well as a prolonged Winter season in the market, former Binance President Bill Qian is looking to change the status quo by investing $100 million in Web3 companies. The goal is to bring five billion internet users over to Web3, with the hope of driving up the market and providing mass adoption. As of now, Web3 is largely regarded as an investment or gambling market. For the masses, there is limited access to everyday services and use-cases, which Qian is looking to change with his venture-capital funding.
Therefore, by bringing Kaifer Zhang to spearhead its Web3 initiative, Alibaba Group seems confident about bringing about changes to the Web3 industry. It is expected that Ant Group’s blockchain business, AntChain, as well as Qian’s funding could be beneficial for Web3, providing easier access and mass adoption of the technology in the near future.
Jin Zhuanglong, Minister of Industry and Information Technology, announced plans to seize a new round of scientific and technological revolution and industrial changes, accelerate the layout of cutting-edge fields such as humanoid robots, Yuan universe, and quantum technology, and comprehensively promote 6G technology research and development, to position the future of industry.
Mapping the Future of Industry Through Action Plans: An Interview with Jin Zhuanglong
In 2019, Chinese President Xi Jinping announced that China needs to “seize the opportunities” presented by technological innovations and the Fourth Industrial Revolution. These remarks have had significant ramifications on the national level and the various industries it serves. Of course, such a sweeping call to action requires careful planning and thought – something that Jin Zhuanglong, Minister of Industry and Information Technology, recognizes. Recently, he has been vocal in calling for actionable plans to harness the potential of cutting-edge fields, including humanoid robots, Yuan universe, and quantum technology.
In 2020, the Central Bank of China issued its Digital Currency Electronic Payment (DCEP) – often referred to as the digital yuan – to the public. This was a signal that China is taking its commitment to technological advancement seriously, and further showcases the government’s forward thinking regarding the Fourth Industrial Revolution.
In an exclusive interview with CryptoPotato, Minister Zhuanglong discussed his plans to seize the opportunities presented by the Fourth Industrial Revolution, as well as the importance of having a well-thought out action plan.
Responding to the recent launch of the National Blockchain Technology Innovation Center, the Minister explained that the project demonstrates China’s commitment to blockchain technology and its potential applications in various industries, including infrastructure and finance. He did stress that private sector investment can be risky and should be undertaken with caution.
When asked about his thoughts on the previously mentioned technologies, such as quantum computing, humanoid robots, and the Yuan universe, the Minister highlighted the importance of research and development in these fields. He noted that such developments will not only further progress the nation but will also help to create a more vibrant and connected local economy.
The importance of talent in such technological fields was also discussed. According to the Minister, it is of the utmost importance that a pool of knowledgeable personnel is cultivated to understand and leverage the potential of these technologies for the benefit of the nation.
The idea of a DCEP was also raised during the interview, something which the Minister believes is essential in putting the tools of the technological revolution in the hands of the citizens. The digital yuan, which is already in circulation in four cities, will be used as a payment method during the upcoming Winter Olympics in Beijing. This is further evidence of the government’s commitment to integrate technology into the daily lives of citizens.
When asked what advice he had for citizens to ensure success in the Fourth Industrial Revolution, Minister Zhuanglong had the following to say: “It is important to understand the new technologies and use them in sensible ways. We should always be looking for ways to use technology to improve the quality of life and make our lives easier. We should also be conscious of the implications of investing in private technologies and make sure our investments are properly educated.”
The Minister’s enthusiasm for the Fourth Industrial Revolution is something that is shared throughout the industry and brings with it a call to action. By having a well-thought out action plan, China can seize the strategic opportunities offered by the new technologies and prepare the nation and its citizens for further advances.
Fire, a global blockchain business ecosystem established in 2013, is joining the BTTC (bitorrent chain) ecosystem to support L2 network development, allowing users to access a secure, low-cost and fast solution for digital asset exchange in 160+ countries and increasing global participation in blockchain technology.
The aim of decentralized interoperability is to create a world of blockchains that can interact seamlessly with each other, unlocking new potentials for the financial industry. In a rather fortuitous turn of events, the crypto exchange Huobi has recently announced that it will join the BitTorrent Chain (BTTC) ecosystem and support the development of a Layer 2 network, providing an open and secure environment for the development of blockchain based applications and services.
Established in 2013 and developed from a cryptocurrency exchange to a comprehensive blockchain business ecosystem, Huobi currently serves over 50 million users in more than 160 countries and places with over $100 trillion in cumulative assets traded. It adheres to three major development strategies of “globalization, diversification, and science and technology”, and provides comprehensive value and services to the world’s virtual currency enthusiasts.
The BitTorrent Chain was launched in December 2021 and is the L2 solution for Ethereum, TRON and BNB Chain. Its core capability is its cross-chain solution which allows seamless asset exchange between different decentralized public chains, creating a powerful super network linking all blockchains. By introducing Zero Proof of Knowledge technology, it can provide users with an open, secure and diverse development environment for all decentralized applications.
The addition of Huobi to the BTTC ecosystem will bring immense potential to the Blockchain industry. As the world’s largest virtual asset trading platform, Huobi’s access to hundreds of millions or even billions of users around the world is difficult to underestimate. Huobi’s entry into the BTTC ecosystem will bring more people and resources to the liquidity pool, marking the beginning of a new era in the growth of decentralized finance.
In November 2022, Huobi completed its brand upgrade, introducing a new development strategy that seeks to educate more people about everyday crypto adoption and promote the free flow of value created by everyone. The project believes that by offering opportunities for users to get exposed to high-quality projects in the early stages, it will be beneficial for all parties involved. The combination with BTTC will certainly create a new synergy that further nurtures the growth of Huobi.
The collaboration between Huobi and BTTC will no doubt open up more possibilities for the decentralized financial industry. For blockchain to interact seamlessly with each other and offer secure and decentralised interoperability, we need more players like Huobi and BTTC who are friendly to blockchains. With the right collaboration and partnerships, we have the potential to move towards a multichain future that works towards financial freedom and acceptance.
The Hong Kong government has taken the initiative to lead the way in cryptocurrencies trading with the issuance of its “Consultation Document”, revealing an ambitious ambition to promote the industry.
Cryptocurrency Market in Hong Kong – Explore Opportunities and Challenges
The past year has already been an exciting one for crypto enthusiasts in Hong Kong, with the government issuing a ‘Consultation Document’ that could potentially legalize retail cryptocurrency trading in the territory. Now, the news is even more encouraging with reports that the mainland government in Beijing is subtly endorsing the move.
The Liaison Office from China has reportedly been a frequent guest at crypto-related gatherings in Hong Kong. The National People’s Congress member and crypto lawyer Nick Chan, believes that as long as there is no direct threat to financial stability in China, Hong Kong is free to explore its own pursuit under ‘One Country, Two Systems’ according to Bloomberg.
The Securities and Futures Commission (SFC) of Hong Kong has taken an important step forward in the direction of its ambition to become a crypto hub. On Monday, SFC began a consultation process for Virtual Asset Service Providers (VASP) seeking a license to provide trading services for retail investors.
The consultation involved various parameters that need to be considered before any token can be listed, including a due diligence process to ensure that all tokens available are pre-approved. Other parameters include setting up a risk profile for clients, to ensure exposure to crypto assets is “reasonable,” and a background check on the issuers and developers, as well as a supply, demand, and liquidity check of listed tokens.
These parameters set by the SFC have put some traders in doubt, with some describing the regulations as “remarkably restrictive and burdensome”. Julia Leung, the SFC’s Chief Executive Officer, states that the measure was taken with the “recent turmoil and the collapse of some leading crypto trading platforms around the world” in mind, to protect investors and manage risks.
The news that Hong Kong’s government may be paving the way for Chinese institutions to invest in crypto has given the markets a major boost. Many in the industry believe that Asia will be responsible for driving the next bull market, but the consultation paper published by the SFC shows that the actual regulations to enter the market will be a lot tougher than many expected.
However, with the progress Hong Kong is making, it looks like the city is set to become one of the most important crypto hubs in Asia; a titanic center of investment and activity in the world of decentralized money. At this point, it’s just a matter of waiting until the government of Hong Kong finishes its consultations and releases the definitive regulations. We’ll just have to wait and see what opportunities and challenges arise with the new regulations.
Jiazi Light Year Think Tank delves into the development of ChatGPT and Artificial Intelligence to unlock the opportunities for the industry, revealing research reports which analyse the application scenarios, investment opportunities and productivity changes it brings to the society.
The world of artificial intelligence (AI) is evolving quickly. And with the emergence of ChatGPT, the latest AI chatbot created by OpenAI, people are recognizing the immense potential behind using AI-powered tools to revolutionize daily life. From enabling more efficient financial transactions to powering complex search engines, AI is on the cusp of unlocking some major advances in technology. But what changes can we expect from AIGC, the application and market for artificial intelligence, now that ChatGPT is gaining traction?
In the world of AI, AIGC (Artificial Intelligence Governance Council) is a governing body, set up to ensure that the developments and applications of artificial intelligence technology are aligned with ethical and legal standards. AIGC is responsible for analyses of the development and evolution of AI technology, such as analyzing the macro trends of AI technology or exploring the investment layout, entrepreneurial opportunities and productivity changes.
The emergence of ChatGPT has expanded the possibilities of AI and has introduced new opportunities. AI can be applied to develop more efficient trading techniques, detect cognitive distortions on social media or distinguish bot conversations. AI can also be used to detect financial risks, predict stock prices and manage users’ crypto funds. These applications will soon extend to fields such as education and even our homes.
Moreover, the release of ChatGPT has sparked competition amongst tech giants like Alphabet’s Google, Microsoft, and Baidu, who are keen to take advantage of the wave and release their own AI chatbot services. Investment in this area has skyrocketed, and the potential for AI to facilitate a more inclusive and innovative online economy is huge.
However, with these opportunities comes many new challenges. With students using ChatGPT for assignments and AI edging out physical labor and mental work, people are asking what the chances are for a successful business out of AI. Further, ethical concerns must be addressed, with AI potential replacing human decision-making in fields like healthcare.
In order to explore these issues, Jiaziguangnian Think Tank conducted a special AIGC study, with the goal of contributing to the exploration of the trends, applications and research models of artificial intelligence technology development. With the power of AI technologies and applications, AIGC is well-positioned to unlocking the potential of artificial intelligence and boost the world’s development.
The Ethereum Shanghai upgrade, along with DeFi product, NFT, Layer 1 and 2 platform, game and NFT updates by Yearn.finance, DYDX, Nexus Mutual, Synthetix, ONDO finance, Filecoin, COSMOS, Parallel Life, YUGA Labs , ILLUVIUM, LOOKSRARE, Stargate Finatic, Helium, and Umee, are bringing new levels of security, liquidity and usability to the market, offering many opportunities for Investors.
The Ethereum blockchain has been undergoing a major transition, and the upcoming “Shanghai Upgrade” is expected to be a game-changer. Set to go into effect in March 2021, the Merge, as it is commonly called, will switch Ethereum from a proof-of-work system to a proof-of-stake one, unlocking more than 16.5 million Ether staked in the blockchain. This upgrade could result in greater supply-demand dynamics that could impact cryptocurrency prices, providing investors with various opportunities.
The Shanghai upgrade, along with other updates, such as DeFi products, NFTs, Layer 1 and 2 platforms, will enable staked Ether withdrawals, reduce transaction costs, and improve the speed of transactions. With competition heating up between Layer 2 solutions, such as zkSync 2.0, Scroll and other rollup solutions, players will have the chance to launch their rollup solutions and benefit from the increasing demand for blockchain based solutions.
Investment and financial services companies such as JP Morgan have already predicted that the upgrade could result in greater revenues for struggling cryptocurrency exchanges such as Coinbase. The potential for higher profits could encourage exchanges to churn out staked ETH rewards to their customers and reap a hefty dividend.
Though the original timing of the upgrade may have been postponed, the Ethereum core developers plan to launch a comprehensive dress rehearsal of the Shanghai upgrade on March 14th, known as the Goerli testnet. Should everything proceed accordingly, the upgrade will begin mid-April and users will be able to withdraw their staked ETH.
While some Ethereum developers may have been concerned that the original timeline was not going to stick, Ethereum core developers are doing their best to implement the upgrade despite any potential risks to the network’s technical systems that could come as a result.
Overall, the Ethereum Shanghai upgrade promises to be a catalyst for the future of cryptocurrency, increasing trading activity and providing numerous opportunities for investors. Staking services and exchanges have already started investing heavily into this upgrade, meaning that there could be many lucrative investments and profit-making markets on the horizon. However, it is important for investors to be aware of the timing and technical risks that such a major upgrade can have on the cryptocurrency market.
Amid FUD (Fear, Uncertainty and Doubt) in the crypto space, Huobi KOREA is fighting to re-establish its brand as a Korean company by attempting to cut ties with Huobi Global and focus on the local market – but with a potential acquisition of shares and employee communications, it’s not going to be easy.
The South Korean cryptocurrency exchange Huobi Korea is doing its best to fight against the FUD (fear, uncertainty, and doubt) that has been swirling around parent company Huobi Global. In an effort to distance itself from Huobi Global, Huobi Korea has announced plans to purchase its parent company’s shares, change its name and even come up with incentives for staff welfare.
It all started back in October of last year when Huobi Global’s largest shareholder (founder Li Lin) transferred all of his shares to the M & A fund under About Capital in Hong Kong. This made the fund the largest shareholder and actual controller of the exchange. Since then, there have been reports that Huobi Global has been in financial difficulty.
In response, Huobi Korea has come up with a plan to sever its relationship with its parent company by purchasing its owned shares and changing its name. According to local media reports, Huobi Korea is looking to acquire the majority of Huobi Global’s 72% shares, held by Chairman Jo Kook-bong. This move was interpreted by industry insiders as “an effort to strengthen its status as a Korean company by renaming and acquiring equity.”
Unfortunately, the changes have come at a cost. Due to regulation changes, the exchange was forced to suspend all transactions for five months, leading to layoffs of over 20% of the workforce. Talks of insolvency and massive withdrawals further hurt Huobi Global’s reputation and spurred Huobi Korea into action.
In an effort to rebuild its users’ trust, Huobi Global recently announced a bounty program using Justin Sun’s image. It encourages people to ask the exchange’s technical support any questions “about the assets, functions, and operations” of the platform and candidates can be rewarded with “great gifts and reward packages” for suggesting the best ideas.
Huobi Korea has also enacted measures to create a better work environment for its employees, announcing compensation for its laid-off staff members and holding internal and external employee conferences to collect opinions.
It’s yet to be seen how successful Huobi Korea’s efforts will be in combating the FUD that surrounds its former parent company. However, its recent actions seem to be a step in the right direction in terms of rebuilding public trust and maintaining its status as a safe “domestic exchange”.
Alchemy Pay ($ACH) is leading the Chinese coin rally. And data suggests Alchemy Pay prices can go much higher throughout 2023. They are collaborating with the likes of Binance, Visa, MasterCard, and PayPal to provide crypto and fiat payment services. In this article, we will explain what Alchemy Pay is, and why $ACH should be on your 2023 watch list.
What is Alchemy Pay?
Alchemy Pay provides real-world crypto payment solutions and fiat on/off ramps for global businesses, developers, and consumers. One key problem in the current blockchain payment landscape is the lack of integration between traditional financial systems and cryptocurrencies. The project aims to address this by incorporating a hybrid solution. The solution is to (1) simplify the use of crypto to access traditional financial services; and (2) have fiat currency access blockchain services and value.
This will be huge for driving crypto adoption, as it is essentially a network system that allows cross-platform payments. For example, users can use their credit cards to make payments in fiat currencies. Their payment gateway converts this into crypto. This allows users to make credit card purchases while benefiting from the advantages of cryptocurrency. Such as faster and more secure transactions.
Payment Channels and Strategic Partners
Alchemy Pay already has a global reach of 173 countries and over 300 fiat payment channels. These include Visa, Mastercard, Apple Pay, Google Pay, regional mobile wallets, and domestic bank transfers. They also have a massive network of strategic partnerships with many major blockchain networks and services. For example Polygon, Chainlink, Arbitrum, Coinbase, and Bybit.
Who is the Team behind Alchemy Pay?
In 2018, Molly Zheng and Shawn Shi established Alchemy Pay in Singapore. Both founders have extensive backgrounds in the financial sector. Zheng previously held the position of senior consultant at PayPal China, and also worked for HSBC China and Mastercard China. In 2021, Zheng was appointed Chairwoman of Alchemy Pay’s Board and was succeeded as CEO by John Tan, the then-COO. Tan was responsible for driving the growth of the project’s payment business. He did this by securing the company’s initial base of merchant networks across Asia. Their team now boasts over 80 members who have deep experience across the blockchain and payments industries.
Furthermore, the announcement of a new licensing regime for Virtual Asset Service Providers (VASP) in Hong Kong has generated public interest in Chinese cryptocurrencies. Even though this licensing regime will not have a direct impact on retail buyers. However, both these catalysts may not have as significant of an impact as anticipated. The uncertainty of the actual size of the monetary easing and the lack of a well-defined concept of a “Chinese coin” remain.
People are still interested in taking advantage of any potential mini-rally despite these uncertainties. And are actively searching for investment opportunities. Whilst $ACH still has a small market cap, but with strong connections and established infrastructure, it could become a leading contender in China this year.
Alchemy Pay news
On 23rd February 2023, Alchemy Pay announced its partnership with Conflux Network. Conflux Network is a permissionless Layer 1 blockchain which connects decentralized economies across borders and protocols. Through this partnership, Alchemy Pay would be able to have an easy fiat on-ramp onto its ecosystem. This on-ramp payment solution will allow people to buy crypto using their local currency, which will give Conflux’s system a higher level of convenience for both beginners and experienced users. By working together, Alchemy Pay will help Conflux expand its reach around the world. Now with 2 of China’s hottest projects joining forces, we will hopefully see a massive boost for both Alchemy Pay and Conflux’s tokens.
Alchemy Pay $ACH Token and Price Prediction for 2023
$ACH is the utility token of Alchemy Pay, issued on the Ethereum blockchain as an ERC-20 token. There is a total circulating supply of 4 billion $ACH. Its primary use is for its partners to pledge their $ACH as an intermediate settlement currency between token payment networks. Also, as a medium for transaction fees. Alchemy Pay coin is required for every transaction. But, businesses and merchants within the network receive $ACH incentives for accepting crypto as payment at their point of sale.
As of 20th February 2023, we can see from the price chart that $ACH price is gaining a momentum. There has been a 142.1% increase over the past seven days. Technical indicators do show that $ACH is overbought. But its long-term 50 & 200 daily moving average crossover indicates a bullish trend. This suggests that $ACH is likely to continue its uptrend. The pump to $0.041 at the time of writing is partly attributed to news of them partnering with Google Pay. Provided they expand their infrastructure and build more connections, $ACH could deliver strong returns in 2023.
Frequently Asked Questions (FAQs)
What is Alchemy Pay?
Alchemy Pay is a blockchain and cryptocurrency project which aims to provide real-world crypto payment solutions and a fiat on/off ramp for global businesses, developers, and consumers.
Is Alchemy Pay a good coin?
Alchemy Pay is a good coin with potential. $ACH is currently at US$0.050599 and its all-time high price was $0.198666. It is currently ranked number 177 amongst all cryptocurrencies in terms of market capitalization.
Is Alchemy Pay a good investment?
Alchemy Pay’s $ACH token is also very popular among Chinese cryptocurrency investors. As with any investment, it is important to do your own research and consider the potential risks before investing in Alchemy.
Does Alchemy Pay have potential?
Alchemy Pay does have potential since the Chinese cryptocurrency community views the project so favourably. Also, the Chinese crypto narrative is seen as a huge trend this year, which will certainly give Alchemy Pay a boost.
Who invested in Alchemy Pay?
Alchemy Pay completed its Series A funding round in 2022. They raised US$15 million from several investors including Charles Schwab and Jay Z.
News of potential quantitative easing in China has led crypto experts to believe that there will be a surge in the value of Chinese blockchain projects. As such, Conflux Network ($CFX), one of China’s public blockchain, has seen a whopping 1600% price increase in 2023. In this article, we will explain what Conflux is, and why $CFX should be on your watch list this year.
If you are interested in another Chinese crypto project, Alchemy Pay ($ACH) is also a top Chinese project this year.
What is Conflux?
Conflux Network is a public blockchain platform designed to support high-performance decentralized applications (dApps). It aims to address some of the limitations of existing blockchain networks such as slow transaction processing times, limited scalability, and high fees. It uses a novel consensus algorithm called Shanghai Tree-Graph that enables high throughput while maintaining decentralization and security. The algorithm allows multiple blocks to be generated in parallel and then merged into a single chain.
Conflux Network also supports a range of smart contract languages, including Solidity, the most widely used language for Ethereum smart contracts. This means that developers can easily port their existing dApps from Ethereum to Conflux Network and take advantage of its faster transaction processing times and lower fees.
Who is the Team behind Conflux?
Conflux Network was founded by a team of researchers and developers from Tsinghua University in China and the University of Toronto in Canada. The co-founders of Conflux Network are Fan Long (CEO) and Xiaolong Wang (Chief Scientist). The team also includes a number of other experienced researchers, developers, and advisors from various fields, such as computer science, blockchain, and finance.
Why is $CFX Pumping?
The current price surge of $CFX seems to have strong support from retail investors, as indicated by social media metrics and fundamentals. This came as a result of two significant developments made by Conflux:
On 15th February 2023, Conflux announced that they are developing blockchain-based SIM cards in partnership with China Telecom, one of the largest wireless carrier in China (390+ million movile subscribers). The trial program will first launch in Hong Kong later this year, followed by key mainland China locations such as Shanghai.
China Telecom, 2nd largest wireless carrier in China 🇨🇳 (390+ million mobile subscribers), has partnered with Conflux to develop Blockchain-enabled SIM cards – BSIM! pic.twitter.com/LQxz34L432
Earlier in late January, Conflux partnered with Little Red Book, the Chinese equivalent of Instagram, to provide NFT services for the social media platform’s 200 million users. The news prompted a 90% increase in CFX’s price.
$CFX Price Prediction 2023
Looking at the technical aspects, CFX has experienced a significant increase in price which has caused it to become very overbought. This can be seen in both the daily and weekly charts where CFX’s relative strength index has risen above 70, indicating that the uptrend is close to its limit.
Additionally, the Conflux Network token is currently testing the $0.28-$0.41 range as a resistance level, which was previously a support level between May and November 2021. If CFX falls back from this resistance area, its price could drop to the range of $0.097-$0.141, which is its main downside target.
This range also coincides with the token’s 50-week exponential moving average (50-week EMA) at around $0.108, which is approximately 65% lower than the current price levels. On the other hand, if CFX manages to break above the $0.28-$0.41 range decisively, its price could rise to $0.84, which was the resistance level during the May-September 2021 period.
Will $CFX Continue Its Momentum Throughout 2023?
From a fundamental standpoint, $CFX is part of the “Chinese coins” narrative that is trending in 2023. With the potential of quantitative easing in China and crypto expansion in Hong Kong, people on the Crypto Twitter space are actively searching for investment opportunities in the Chinese market, taking advantage of any potential rally. $CFX still has a relatively small market cap, but has the potential to deliver strong returns for its investors if its momentum continues. And its momentum will likely continue if continuous development is seen in the Asian market.
China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.
The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.
Basically, DCEP is poised to become a digital version of the RMB.
Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.
Hence the Chinese consider that it is a requirement to form a new currency clearing network.
According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.
A mandate to adopt Blockchain
China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘country’s development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.
China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.
History and development of DCEP
Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, China’s central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.
Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.
Uses for DCEP
DCEP will be the only legal digital currency in China
DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).
Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”
DCEP is not for speculation
China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on Sina.com.
It is also not possible to mine DCEP or stake on the DCEP network.
Cross-border payments with m-CBDC Bridge
China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS).
According to a joint statement in February 2021, the People’s Bank of China and the UAE’s central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019.
The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock.
This move aligns with China’s long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.
The announcement also comes mere weeks after China’s joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with €10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese government’s enterprise credit information agency.
Special features of DCEP
DCEP is a Centralized Currency
DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.
NFC Contact based payment
According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.
With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.
China Construction Bank launches DCEP wallet
On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.
Finally, users can send/receive digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.
CCB DCEP wallet
However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get an error message saying that the function is not yet officially available to the public.
Tencent to be a major partner of DCEP
Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real-world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.
The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.
According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.
DCEP will operate on a two-tiered system
The issuance and distribution of DCEP will be based on a two-tiered system.
The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.
The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals. In this tier, the intermediaries that have received DCEP will distribute it to retail participants so that it would circulate through the market e.g. through people purchasing items at stores etc.
The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.
The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nationwide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.
DCEP red packets to be launched for Chinese New Year
China’s DCEP app has launched a red packet gifting feature in time for the Chinese New Year on 22nd January 2023. The app will allow users to send the red packets i.e. “hongbao” containing DCEP to others. This is based on the Chinese New Year tradition of gifting lucky money during the annual festival. In fact, WeChat Pay and Alipay already have this feature for gifting CNY. However, it is the first time that e-CNY will be gifted in such a way, with hopes that this will further pave the way for the mass adoption of DCEP.
DCEP can be used to pay expressway tolls
On 28th December 2022, Chongqing Expressway Group announced it has completed the installation of equipment to accept DCEP for expressway tolls. From 30th December 2022, DCEP can be accepted as payment for tolls on the Chongqing Expressway. Users will need to download the e-CNY app and then simply present the payment QR code at the toll booth.
PBoC’s financial statistics reports now include DCEP/e-CNY
On 10th January 2023, the PBoC released its annual Financial Statistics Report for 2022. What is worth noting is that for the first time, the PBoC included statistics on DCEP/e-CNY. The Report states that as of the end of December 2022, the amount of digital currency in circulation was 13.61 billion yuan. This equates to around 0.13% of the total balance of yuan (13.61 trillion yuan) in circulation at the end of 2022.
Are people in China using DCEP?
According to a report on 28th December 2022, there has been over US$14 billion worth of DCEP transactions since its launch in 2020. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since around 903.6 million people use mobile payments in China, according to a 2021 UnionPay report.
DCEP scams
Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.
Knock-off clones of DCEP are already trading in (potentially) scam exchanges.
How to buy DCEP?
Currently, DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.
Implications of DCEP?
Is DCEP a challenge to the US monetary system?
The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.
Alipay and WeChat being accepted at an ATV rental shop
With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.
In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.
Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.
From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.
Appearance on Chinese television debate show “Tiger Talk”
On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (一虎一席談). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.
Guest appearance on Tiger Talk
Implications of DCEP on Bitcoin and cryptocurrencies
In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.
However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.
As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.
In a confusing twist, however, the CCP’s official media outlets 参考消息, Xinhua and CCTV have been pushing out headlines that crypto assets are the best-performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.
Hmm this is an interesting propaganda vibe from CCP’s official media outlets as “参考消息”, Xinhua and CCTV2
the headline “cryptoasset is the best performing asset YTD” was featured on all avenues, news paper, online media and TV
Will DeFi push governments to finally adopt CBDCs?
Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen. (Xanax)
So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.
The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.
FAQs
Is DCEP backed by Gold?
The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.
Will DCEP be interoperable with other Cryptocurrencies
There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.
Who can issue e-CNY?
There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).
Which Chinese Cities can sign up and use the e-CNY app?
Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.
Can tourists or non- Chinese locals use DCEP?
No, DCEP is not fully rolled out yet and is only available in select cities in China.
Is China using DCEP?
According to a report on 28th December 2022, there have been over US$14 billion in transactions since the launch of DCEP in 2020 and October 2022. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since, according to a 2021 UnionPay report, around 903.6 million people use mobile payments in China.
When will China officially launch DCEP e-CNY?
Whilst there is ongoing DCEP/e-CNY testing on in increasing scale, there is no official announcement as to when and how China will fully roll out DCEP/e-CNY.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
