Market maker Phillip Gillespie warned that China’s push to launch the digital yuan could not bode well for the future of Bitcoin and more coins.
The chief exec of the crypto maker and liquidity provider B2C2 Japan told Bloomberg that after China releases a CBDC, the country may also clamp down on the crypto space.
“Once a digital yuan is introduced, that’s going to be one of the biggest risks in crypto.”
Disrupting massive liquidity amounts
Gillespie said that new regulatory measures could disrupt the “tremendous amount of liquidity” that’s coming from the Chinese market as he sees the possibility that Tether (USDT) could be banned in the region’s crypto marketplace.
According to the latest data coming from the Daily Hodl, converting yuans to tokens is already prohibited in China.
It’s been also revealed that citizens use the dollar-pegged stablecoin Tether as a work-around to trade Bitcoin (BTC) and other digital currencies.
More than that, it’s been revealed Gillespie thinks the re-routing could end soon while sounding the alarm that a massive liquidity shock could happen if China bans the use of USDT.
“What would happen is there’s going to be massive panic selling.”
It’s been also reported by the same online publication that Tether CTO Paolo Ardoino downplays the potential effect of CBDCs on stablecoins.
“Tether’s success has provided a blueprint for how a CBDC could work. Furthermore, CBDCs are unlikely to be available on public blockchains such as Ethereum or Bitcoin. This last mile may be left to privately-issued stablecoins.”
Speaking of CBDCs, it’s been just revealed that Ripple is testing a private version of the XRP Ledger that is designed to offer central banks a solution for powering digital currencies.
The project is called the Central Bank Digital Currency (CBDC) Private Ledger, and it will utilize the same blockchain technology as the XRP Ledger.