King's Bitcoin! Tencent Research Institute: Should explore incorporating Bitcoin into national foreign exchange reserves

Tencent Research Institute published an article on the 13th titled "Development Pattern, Potential Risks, and Recommendations for Digital Currency," in which it suggested: "Exploring the inclusion of digital currencies such as Bitcoin in the national foreign exchange reserves."

Additional information: Tencent Research Institute, Original article "Development Pattern, Potential Risks, and Recommendations for Digital Currency" has been deleted: View reprint content

Chinese Academy of Sciences Researcher: Major Challenges for China

The author of this article is a researcher at the Chinese Academy of Sciences Strategic Consulting Research Institute. The digital currency is divided into: private digital currency, stablecoins, and central bank digital currency. According to the definition, cryptocurrencies like Bitcoin are considered private digital currencies:

Private digital currency refers to “currency” issued by private organizations, without government credit endorsement, using blockchain technology for encryption. Although nominally called "currency," it essentially belongs to non-monetary assets, generally referred to internationally as "cryptographic assets."

As for the so-called central bank digital currency, it is similar to China's issuance of DC/EP: "By the end of 2020, our country began pilot use of the central bank digital currency (DC/EP) in Beijing, Shenzhen, Suzhou, and other places, becoming the earliest country among major economies to test and issue a central bank digital currency."

This research believes that digital currency is a new form of currency in the digital economy era, representing the development direction of modern credit currency forms, promoting innovation and development of blockchain technology, and driving energy development in remote areas, but also impacting the financial environment.

The analysis in the study points out the major challenges of digital currency to China:

1. Illegal Financial Services: Domestic companies establish overseas and provide illegal financial services domestically. For example: foreign exchange margin trading, ICO; cross-border money laundering through digital currency; gambling, fraud, stock trading, etc.

2. Hindered Low-Carbon Goals: The surge in coin prices leads to a large amount of resources flowing into the mining industry, damaging low-carbon emission goals. The article states: "Although many countries support 'minting' through clean energy, with the skyrocketing prices of digital currencies, more and more fossil fuels are used for power generation to support 'mining'." This statement aligns with Musk's recent criticism of Bitcoin's environmental impact; however, Musk may have ulterior motives.

Suggestions: Explore Including Bitcoin in Foreign Exchange Reserves

Despite concerns about the development of private digital currencies like Bitcoin, the article still suggests closely monitoring developments due to unclear prospects and trends, preparing risk mitigation solutions in advance, and actively exploring the inclusion of private digital currencies like Bitcoin in foreign exchange reserves.

Furthermore, regarding mining activities using non-environmentally friendly energy sources, it is recommended to include them in discussions within China's carbon reduction plans.