Today, we want to tell you about E-Yuan and examine the positive and negative aspects of this ambitious new project, dubbed by some as the first state cryptocurrency.

Before tackling this article, it might be useful for you to learn more about what StableCoins are, click here to go to the specific article.

What is E-Yuan

They call it state cryptocurrency, as it is a project launched in 2019 by the Chinese government to try to curb the rampant cryptocurrency phenomenon.

Let’s start by saying that calling it a phenomenon is an understatement as for China it is a real threat to national security as it undermines central government authority.

In fact, with the disruptive spread of cryptocurrencies, China has seen a whole series of controls on the economy and financial flows circumvented.

In recent years, China has tried several times to put a stop to this phenomenon, trying to ban the use of these currencies in every way with little result.

In fact, it is impossible to prohibit their use as it would imply controlling every piece of software used by every citizen accessing the Internet.

In addition to the objective impossibility of banning them, there is also the incredible financial growth of new businesses that make use of these new technologies, which, as they grow, assume more and more political weight in the control rooms.

It is only after looking at the whole picture that it becomes clear that the E-Yuan is not a blockchain, but a desperate attempt to stem a raging river.

What distinguishes a blockchain?

The distinctive features of a blockchain are what determine its success, namely: decentralisation, disintermediation, transparency and verifiability, and immutability of the ledger.

The absence of even one of these distinctive elements makes it lose its definition. But in the case of E-Yuan, almost all of them are missing.

Decentralisation of the blockchain par excellence occurs by distributing copies of the entire chain all over the world (even on satellites in orbit), something that can certainly not be said of China’s digital currency as it is located in China’s central bank.

Disintermediation occurs by removing a central government body and distributing political decision-making power to each node in the chain. Effectively making the chain indestructible to any kind of aggression (war, coup d’état, catastrophe, speculation).

Transparency of transactions, by means of a public register that can be viewed and consulted by anyone without indicating any personal information.

Last but not least, immutability, i.e. the guarantee that transcribed information cannot be altered, manipulated, deleted or in this case censored.

If a product does not bring technological improvements, it is very unlikely to be appreciated more than another product that instead brings a revolution. Especially on an international level.

What advantages E-Yuan brings

One must necessarily break a few lances in favour of the Chinese project.

It is certainly a revolutionary project, an important signal that economies do not intend to sit still and wait.

Surely the Chinese government will initiate large-scale distribution propaganda to promote its digital currency project.

Almost certainly in fact, this digital currency will be an excellent gateway for cryptocurrencies, accelerating the move towards more crypto finance.

Thus, the E-Yuan will not fulfil the purpose for which it was created, it will not be able to replace the threat of cryptocurrencies.

It will have its own very important role to play in the digitisation of traditional currencies, however, increasing the adoption process of cryptocurrencies and still bringing important economic benefits to China.

Almost certainly, if the project is successful, this digital currency will be able to aspire to the definition of StableCoin.

At the end of the day, if you can’t kill it, the only thing you can do is try to make friends with it and profit from it, and this will probably be the philosophy that many nations will embrace in the near future.

We at Made hope this article has been of interest to you, if you would like to learn more about the benefits of digital currencies applied to your business please contact us.