China’s digital yuan will eliminate shadow banking: Dovey Wan

Dovey Wan, Founding partner at Primitive Ventures, has been proactive in uncovering China’s crypto-space for the global audience. She recently featured on an edition of the Off the Chain podcast to clarify the misinformation that currently thrives in China. Providing a macroeconomic background, Wan claimed that China has been recording 10% GDP growth over the past 30 years, owing to different business verticals.

To further drive this economy, Wan stated,

“This (Digital Yuan) was not the first time that China’s presidency publicly promoted blockchain. The Chinese government has always been pro blockchain but this time, it’s definitely different.”

Domestically, China has been dealing with shadow banking, a process that involves not showing assets to the People’s Bank of China (PBOC), something that inflates the M2 monetary supply of the nation. Addressing the notion towards cryptocurrencies, Wan highlighted that although there have been restrictions on facilitators (crypto-companies and exchanges), Bitcoin has never been banned in China.

Speaking about China’s involvement in the global crypto-space, Wan said,

“Conservatively, including both mining pools and mining itself, 60 to 70% of the hash power comes from Chinese people.”

Wan also highlighted how China’s pre-existing cashless economy enables faster adoption of cryptocurrencies as the country already possesses the infrastructure to allow the general public to buy Bitcoin using fiat currency on-ramp over applications such as WeChat.

China’s efforts towards creating a controllable and more transparent system will eventually help the country eliminate shadow banking. Wan concluded by stressing on the fact that,

“Everything that will be hosted on the private cloud of the PBOC, is not cryptocurrency. But it will be beneficial for the Chinese citizens as it will eliminate shadow banking.”