China Cryptocurrency does not necessarily refer to the country's currency but to the government's attempt to introduce a more secure form of money. Unlike other countries that have had a hard time introducing appropriate economic policies and dealing with the issue of money laundering and terrorism, China has long been battling with these things. In fact, the People's Republic of China was one of the last countries to adopt a formal Cryptocurrency policy. This move came after the passing of the 1997 Law on Cryptocurrency by the National Development Party. Although the central government has made some attempts to institute reforms in terms of regulating and monitoring Cryptocurrency within the country, the lack of support from within the Chinese government has been the biggest hindrance to the progress of these efforts.
The reason why the Chinese government has been slow to embrace Cryptocurrency is mainly due to the fact that they are still dealing with the aftermath of the recent global financial crisis. The collapse of the world's largest economy has not only shaken the Chinese economy but has also affected many other countries as well. To make matters worse, a number of fraudulent acts have been attributed to the collapse, such as hacking into financial institutions and leaking financial information. To add to this, China has not yet managed to develop its own virtual currency, leading to the perception that the country's economy is still based on paper alone.
The main argument against the adoption of Cryptocurrency is China itself. The country has always wanted total economic control over the currency it is trading, something that the Virtual Currency Chamber of China claims it wants to attain through the introduction of its own Cryptocurrency. The Chamber has also threatened to take legal action against any country that attempts to interfere with its development process. The government of China and its government-run banks have an excellent grip on the country's economy, something that the virtual currency chamber seems to be unable to accomplish.
Although the government has taken a hard line with regard to Chinese Cryptocurrencies, the lack of standardization in the country's economy has allowed for unfair trading practices. As a result, China's economy has become somewhat stagnant over the past two decades, allowing for a much lower economic growth than other countries. The problem lies in the fact that there is no central exchange mechanism, and other economic factors such as trade are primarily affected. As such, a significant part of the country's economy comes from the booming gold and currency trading industries. Since gold is highly appreciated in China, and the country has one of the world's largest gold and currency reserves, this allows them to gain a substantial amount of wealth from its natural resources without having to exchange them for hard cash.
The government has long desired an economic shift in the direction of heavy industry. Unfortunately, it has been difficult to see progress in this area due to political and social pressures from the government. It is challenging to track and regulate, resulting in a lack of job opportunities for those within the industry. These employees are forced to accept low wages and temporary employment and keep traveling from place to place in search of a better opportunity. This trend has only increased since the global economic crisis began.
China has one of the largest human populations in the world, and because of this comes with a massive population of potential consumers. However, this also presents several challenges to its economy. As it is challenging for the Chinese government to plan and monitor its economy centrally, the country's leaders have often had to resort to issuing directives or laws to deal with various problems. For example, one law mandates banks to trade currencies based on the PBOC's policy, which has led to a significant increase in the country's currency rate, causing many businessmen to lose large amounts of money.
With the exception of small islands like Hong Kong, China does not enjoy any significant protection from foreign currencies, meaning that most countries have been quick to capitalize on China's flaws and turn them into their own profit centers. In order to combat this, the Chinese government is working diligently to improve the economy through more stable practices and more efficient methods. One of the most common schemes has been to take advantage of the country's bureaucracy, tricking them into believing that the money is coming from legitimate sources.
The biggest problem currently facing China is the slowing economy. As this problem continues to affect the economy, it will become increasingly more difficult for the Chinese government to continue issuing directives. If this happens, the government may decide to introduce controls similar to those of the US dollar, leading to hyperinflation or the paper-based value of the currency being significantly reduced. Whether or not this occurs endures to be seen, but experts do believe that it is a possibility.