It is understood that the new law will precede the launch of China's state-backed cryptocurrency, which is expected to be unveiled early next year. No specific dates have been given but in August a senior official at China's central bank said it was "close to being out".
China's interest in the space appears to have had a positive impact on already established cryptocurrencies like bitcoin, which some say add legitimacy to the cryptocurrency industry.
China's plans were accredited for bitcoin's recent price surge that saw its value rise from below $7,500 to above $10,000 in the space of just a few hours.
“This is a clear signal that the leader of the world’s second-largest economy is moving towards embracing the technology – in which Bitcoin plays a vital part – and therefore taken as a positive boost for the whole digital currencies sector," Nigel Green, CEO of financial advisory firm deVere Group, told The Independent.
“Perhaps quite sensibly, investors could not ignore the comments and sentiment expressed by President Xi and reacted by increasing exposure to bitcoin. It also comes as China is said to be developing its own national digital currency, which is further proof that in some form or another, digital currency is the future."
China is well on the road to completely dispensing with cash. It is now increasingly difficult to use cash in stores and an increasing proportion of business is transacted online. The benefits for a sovereign, of creating a digital currency where it has full control over the issuance, supply and availability but enforces the use, flow and acceptability of transactions are obvious. Quite whether it is beneficial for investors and consumers is an altogether different question.Click HERE to subscribe to Fuller Treacy Money Back to top