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China’s Digital Yuan Little Used, Former Central Bank Official Says – Finance Bitcoin News

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China’s Digital Yuan Little Used, Former Central Bank Official Says

Trials of the digital yuan have produced disappointing results, according to a report quoting the former head of research at the Chinese central bank. The new form of national fiat has brought no benefits to the banks and should expand beyond being employed only as a substitute for cash, the banker believes.

Common People Used to Cash and Cards, Ex-PBOC Executive Notes

Usage of China’s central bank digital currency (CBDC) has been “low, highly inactive,” according to Xie Ping, former director-general of research at the People’s Bank of China (PBOC). Ping made this observation at a conference devoted to digital finance.

“The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan” ($14 billion), he detailed, quoted by the financial news outlet Caixin and Reuters. In his view, the application of the digital yuan needed to be widened.

“The results are not ideal,” Xie concluded during the forum which was organized by the Tsinghua University. He emphasized that “what needs to change is the digital yuan acting only as a substitute for cash and only for consumption.”

The payment market structure formed by cash, bank cards, and third-party payment platforms are currently satisfying the needs for daily consumption in China. “The common people are used to it, and changing it is difficult,” he remarked.

China has been at the forefront of the race to develop CBDCs with efforts to promote the digital yuan through a number of red envelope campaigns, giving away e-CNY to stimulate its use, and by expanding the geographical scope of the pilot project to new cities and regions.

Authorities have also been trying to increase the use cases for the digital version of the renminbi, with the latest examples including the introduction of digital yuan payments in the public transportation systems of Ningbo and Guangzhou. In September, the PBOC called for more of these use-case scenarios and urged for deeper integration of its new currency with e-payment providers.

According to Xie Ping, digital yuan business had no synergistic effect and no commercial benefits for banks’ business while third-party payment systems such as Alipay offered a range of more attractive functions such as investment, insurance, and consumer lending.

That’s why the ex-central bank official believes digital yuan usage can be expanded by allowing individuals to buy financial products with the state-backed coin, for example, and by connecting it to more traditional payment platforms in order to create new opportunities to spend it for consumption.

Tags in this story
CBDC, CBDCs, Central Bank, China, chinese, Circulation, Crypto, Cryptocurrencies, Cryptocurrency, Digital Currency, Digital Yuan, former official, Official, PBOC, trials, use, use cases, Yuan

Do you think use of the digital yuan will grow with an increase in the use-cases offered by the Chinese government? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Data Shows 50% Of Bitcoin Hashrate Controlled By Two Mining Pools

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50% of Bitcoin hashrate Controlled by Two Mining Pools

Bitcoin hashrate is becoming highly centralized, with a few mining pools controlling most of the blockchain mining power. The latest data from Mempool indicates that 50% of the total hashrate is held by Foundry USA and Antpool. 

A Highly Centralized Mining Network

Foundry USA has maintained a hashrate of over 30% of the total Bitcoin network for several weeks. It became the first mining pool of non-Chinese origin to lead the list in November 2021, following the ban on Bitcoin mining in China in the middle of the same year. 

Back then, Foundry USA contributed 17% of the total Bitcoin hashrate. Today, the US-based pool averages 34.1% of the mining power, equivalent to about 104 EH/s, considering that the Bitcoin hashrate is around 300 EH/S. 

Related Reading: First Bitcoin Mining Powered By Nuclear Energy To Open In The U.S. In Q1 This Year 

Antpool comes in second with about 18.0% of the total hashrate equivalent to about 58 EH/s. The Chinese-based pool used to be the largest Bitcoin pool but was affected by the ban on crypto mining which caused several miners in the region to migrate. 

Bitcoin Pool distribution records on Dec. 29, 2022 (3-day stats)/Mempool.com

What Is Behind This Trend?

The graph shows that over 80% of Bitcoin’s mining power is concentrated among just 5 pools. This contrasts with the beginning of 2022, when these five mining pools barely exceeded 60% of the hashrate. 

Some factors could have contributed to this rise. One of which is the location of the servers of the said pools. The closer the servers are to the pools and mining facilities, the lower the information transfer latency. This means that a miner will likely get more shares in the mining process and earn more Bitcoin (BTC) by connecting to a closer server. 

Bitcoin hashrate difficulty
Bitcoin hashrate difficulty for January/CoinWarz.com

Another factor is the financial incentives offered by these major mining pools. Bigger mining pools can consistently distribute profits to their members, who pay a commission for mining with their resources, driving more miners to their ecosystem. This is evident with the high mining difficulty in recent weeks due to the bullish movement of Bitcoin, making it difficult for smaller mining pools to be profitable. 

Related Reading: Why The S&P 500 Could Help Send Bitcoin Soaring Higher

However, Bitcoin’s highly centralized mining system poses significant dangers to the cryptocurrency. The miners could agree to reject transactions that do not meet a specific parameter leading to a 51% attack. 

We’ve seen such attacks occur on other Proof-of-Work blockchains like Ethereum Classic, which could be a problem for Bitcoin. In addition, these pools are recognized companies and could face pressures from regulatory agencies trying to control activities on the Bitcoin network. 

Bitcoin Price

So far, Bitcoin is still maintaining its bullish trend, with the leading cryptocurrency up by 40% since the start of the year. As of the time of writing, Bitcoin is trading at $23,400, according to data from Tradingview.com. 

Bitcoin Price on January 28| Source: BTCUSDT on Binance, TradingView
Bitcoin Price on January 28| Source: BTCUSDT TradingView

Featured image from Pixabay, charts from Trading View, Coinwarz, and Mempool


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This week in Crypto; Axie, Aptos Record Big Gains as Ethereum Drops

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This week in Crypto; Axie, Aptos Record Big Gains as Ethereum Drops

On Sunday morning, Ethereum, the second largest crypto by market capitalization, was the only top ten coin that saw a drop in value. Other major coins have continued to record gains for the fourth consecutive week.

Meanwhile, the most popular crypto, Bitcoin, has seen 7-day gains of about 3.2%, and as of this writing, it is trading at $23,221, as per CoinGecko. This week, researchers have claimed that the ideal time to take long positions in the crypto market is during the end of the Chinese New Year’s first day.

Data on CoinGecko shows that Ethereum has dropped by 5.3% in the past seven days and is trading at $1,572. On Tuesday, Ethereum developers revealed they had achieved a significant milestone toward the network’s most anticipated update, the Shanghai Upgrade. The upgrade will allow stakers to withdraw their funds.

Aptos Records 7-day Gains of 57%

Aptos is up 57% this week, and at the time of publishing, it is changing hands for $17.10. It is difficult to tell what’s fueling the rally, but a huge portion of the token’s trading volume has been from arbitrage trading on the south Korean-based exchange, UpBit.

Some exchanges in South Korea usually price crypto higher than other global exchanges. Many traders involved in arbitrage trading refer to this discrepancy as Kimchi Premium. It is worth noting that this is how FTX’s ex-CEO Sam Bankman-Fried started his crypto trading journey.

Launched last October, Aptos began trading at $13 before it crashed by 45% following criticism that the developer behind the blockchain did not reveal its tokenomics and failed to fulfill their promise of processing over 100,000 transactions per second. The current price means the investors have recovered their losses.

Axie Infinity is Up 25% This Week

On the other hand, Axie Infinity (AXS) recorded an increase of 25% in the past seven days. On Monday alone, the token gained about 24% following a token unlock that saw about 2.2% of the game’s total supply released to the market. According to CoinGecko, AXS is trading at $11.45 as of this writing.

Other Cryptos That Saw Notable Gains

Other top cryptocurrencies that recorded notable rallies this week include OKB. The token currently trades at $38.23, representing a 14% increase in the past seven days. In addition, Avalanche rose by 17% to change hands for $20.28, while Polygon, the tenth largest crypto by market cap, increased by 8% and is trading at $1.12.


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Bitcoin’s [BTC] price reversal might be on the cards?

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Bitcoin's [BTC] imminent price reversal might be on the cards?

  • BTC’s price has rallied by 40% since 1 January.
  • Investors have recorded significant gains, and now, a price reversal might follow. 

Exchanging hands at the $23,200 price mark at press time, the leading coin Bitcoin [BTC], currently trades at levels last seen in August 2022. On a year-to-date basis, BTC’s price has rallied by 40%, per data from CoinMarketCap.

Sharing a statistically significant positive correlation with several other assets in the market, the growth in BTC’s price has resulted in the growth in the value of several other crypto assets in the last month.

According to data from CoinGecko, global cryptocurrency market capitalization has increased by 21% in the last month.


How much are 1,10,100 BTCs worth today?


Holders are in profit, but for how long?

BTC’s rally to a five-month high in the last month has led many of its holders to log profits on their BTC holdings. An assessment of the cost basis for short-term and long-term holders revealed this.

The cost basis for any BTC holder is the average purchase price of the BTC they possess. This considers any variations in BTC’s price at the time of purchase. This cost basis determines capital gains or losses when the BTC is sold. 

According to Twitter analyst Will Clemente, the cost basis for short-term and long-term BTC holders were $18,900 and $22,300, respectively.

However, since BTC’s price has rallied beyond these points, these cohorts of investors were “no longer underwater,” Clemente said. 

Further, CryptoQuant analyst Phi Deltalytics assessed BTC’s short-term Spent Output Profit Ratio (SOPR) and found that “sentiment from Bitcoin short-term on-chain participants has reached the greediest level since January 2021.” According to the analyst, the SOPR was positioned well above the bullish threshold of one, indicating an overly stretched market.


Is your portfolio green? Check out the Bitcoin Profit Calculator


Deltalytics noted further that the bullish trend could be short-lived without an increase in stablecoin reserves on spot exchanges. 

Source: CryptoQuant

A look at Crypto Fear & Greed Index confirmed the analyst’s position. At press time, the index showed that greed permeated the cryptocurrency markets.

When the index is in the “greed” range, it means that investors have become increasingly confident and optimistic about the market and may be more willing to take on risk.

This also suggests that prices are becoming overvalued and that a market correction may be imminent.

Source: Alternative.me

An assessment of BTC’s movement on the daily chart confirmed the possibility of a price correction. Since 21 January, the king coin has traded in a tight range.

When BTC’s price oscillates within a tight range, it means that the price is not making significant moves in either direction and is staying within a relatively narrow band. 

An analysis of BTC’s Money Flow Index (MFI) and Chaikin Money Flow (CMF) indicators raised more concerns as these technical indicators have been trending downwards since 21 January. 

The tight range of BTC’s price combined with downtrends in the MFI and CMF suggested a lack of buying momentum and potential for increased selling pressure.

This also showed that the market was likely to break down from the tight range to the downside.

Source: BTC/USDT on TradingView


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