China to attempt integrating blockchain with CBDCs this year

Amidst all the attention that cryptocurrencies have garnered over the past 12 months, one of the biggest developments has been the growing rush from central banks all over the world to try and get in on these developments. Cryptocurrencies, which were previously derided by global financial institutions, which also tried to block their development, look like they are here to stay, and also likely to be at the forefront of the evolution of money and finance in the years to come. This would mean that central banks would have much less control over money supply, and therefore the economic environment of their respective economies, and so various central banks all over the world have been investigating the prospects of central bank digital currencies (CBDCs). China has been one such country; in fact, it is probably one of the countries which is leading research into CBDCs as well as into blockchain networks and how they can be integrated with existing systems. Thus, it is perhaps no surprise that they are now looking to adopt CBDCs into their national blockchain network, the BSN.

It must be noted that blockchain has many more applications than just improving the speed, efficiency and safety of transactions online. There have been sectors as wide ranging as shipping, sports, healthcare, online gambling and retail, among many others, which have been considering blockchain networks to solve a variety of problems, many of which have arisen over the past 12 months or so due to the pandemic. The case of online casinos is an interesting one in this context. There has been a lot more demand for online gambling in the past year or so due to the pandemic shutting down land-based casinos globally. This has also led casino operators to innovate to draw more players, as well as better prepare themselves for the future, and one of those ways has been to look at blockchain. Many online casino sites are being built on blockchain, making them far more secure, as well as more trustworthy, since it is impossible to tamper with the games to rig them or otherwise defraud either the casino or the player. At the same time, many of these casinos have also begun offering their players the option to make payments through cryptocurrencies. Litecoin (LTC) gambling casino has proven to be immensely popular, and could easily become one of the biggest factors in the growth of online gambling in the years to come.

Thus, the potential for blockchain to be a game-changer for various sectors is huge, which is why there is so much research taking place on it. China is looking to the BSN to build a universal digital payments network (UPDN) in 2021, which will also integrate various CBDCs from around the world as and when they are launched. The aim is to have this payment network up and running in five years, with the beta stage expected to be launched in the second half of this year.

China is perhaps the most ambitious country with regards to blockchain and its possibilities. It is looking to integrate the Blockchain Service Network into everyday life, and therefore the creation of a universal payments system based on this network will be a huge step in that direction, as it will allow people to seamlessly transact on any platform and at any location, with fiat or digital currencies. This is also a step towards the development of smart cities and the digital economy in China, and it will be interesting to see how this particular project develops, in conjunction with global efforts to push out CBDCs sooner rather than later.