With several Chinese state actors waxing lyrical about blockchain technology, Joseph Lubin — co-founder of Ethereum, says Beijing will not adopt the more decentralized aspects of the emerging technology.
Lubin who is also the ConsenSys chief opines that the country’s proposed digital currency will ultimately become another system of control utilized by the government.
Meanwhile, China’s central bank says that it isn’t in any particular hurry to lunch the digital RMB with several studies still being performed.
Beijing Will Not Promote Decentralization
Speaking to CNBC, Lubin called into question the extent of China’s dalliance with blockchain technology and its attendant pivot towards decentralization. The Ethereum co-founder echoed similar concerns recently shared by stakeholders noting that China’s penchant for censorship will not allow the flourishing of decentralized systems.
Commenting on the matter, Lubin remarked:
“China is probably not interested in that aspect of blockchain technology. They, I believe, will bring a digital RMB to China that makes use of some of the elements, some of the primitives, say cryptographic primitives of blockchain technology. But there is no real reason for China to make use of [the] decentralizing aspects of blockchain technology.”
Digital RMB is Another System of Control
On the subject of China’s proposed digital currency, Lubin declared that it would ultimately be an extension of the government’s control over the financial activities of its citizenry. According to the Ethereum co-founder:
“I think that the central bank and the government have very significant control already. My guess is that it would be used to maintain the control that they have but also to potentially enable interoperations between more public systems or more global systems.”
This connection with global systems might point towards a desire by Beijing to participate in a parallel payment system that does not require the use of services like SWIFT. China has been among a group of nations that have accused the U.S. of weaponizing platforms like SWIFT to maintain U.S. dollar hegemony.
Back in October, the vice-chairman of the China Center for International Exchanges remarked that the country’s digital RMB will eliminate its dependence on SWIFT for cross-border fiat liquidation.
Qifan who was delivering a speech at the inaugural Bund Summit in Shanghai declared that systems like SWIFT will soon be replaced by other platforms not under the control of authorities in the U.S.
There continue to be several reports detailing the progress on the proposed digital RMB. However, no official release date has emerged from the People’s Bank of China (PBoC).
The PBoC has reportedly been studying the modalities for the creation of national digital currency. As reported by Blockonomi back in October 2018, the central bank has been recruiting digital currency specialists.
Speculation exists that the emergence of Facebook’s Libra has forced the central bank to accelerate its work. China, like many major economies, has come out vehemently against the Libra project highlighting the risk it poses to sovereign monetary control.
Blockchain Popularity Growing in China
Recently, there has been a significant increase in the decibel levels of blockchain-related chatter coming out of China. The country’s president has even joined the trend extolling the potentials of emerging technology.
As previously reported by Blockonomi, the Chinese President stated that blockchain will become a “core” tech in China. Despite its crypto trading and initial coin offering (ICO) ban, Beijing has never expressed a negative attitude towards blockchain technology. The country has also enacted a cryptographic law which will come into effect from the start of 2020.