Bitmain has announced that it was planning to create more than thirty startups that will create “private central banks” powered by blockchain. Bitmain is Bitcoin mining hardware giant. According to Jihan Wu, Bitmain Co-founder, there are major differences between central banks that back fiat currencies and the growing plethora of cryptocurrencies worldwide.
From what Wu said, the startups they are looking at creating will bridge those two worlds, explaining that a private central bank – distinct from institutions like the Federal Reserve, which is technically private but is linked to the U.S. government – “are better at creating more convenient user experiences of consumers.”
Wu went on to explain Bitmain is very much interested in private central bank startups that are going to use blockchain technology to issue private currencies and set it as a service, in a legal way. Wu further pointed out the lucrativeness of such ventures, highlighting the income earned by the Fed and noting that “we all know that a central bank is a very profitable business.” Even with this, Bitmain has been expanding its mining ventures to Canada as well.
According to Wu, it is quite unfathomable that the cryptocurrency market will consolidate around a few digital coins. He noted the rise and fall of Bitcoin, the rise of other coins such as ether and Ripple and concluded that it might not be possible for consolidation to occur. He pointed out that no perfect cryptocurrency exists, hence the need for numerous options within the market.
As far as crypto regulation is concerned, Wu said that many tokens would clearly fit in the definition of securities as given by the U.S. Securities and Exchange Commission (SEC) and may need to register with the government.