PBOC: China is almost ready to launch its own cryptocurrency

PBOC: China is almost ready to launch its own cryptocurrency

The People’s Bank of China announced its readiness to launch its own digital currency based on the blockchain technology. But this will not lead to any changes in Beijing’s monetary policy.

The deputy director of the People’s Bank of China, acting as the central bank in China, said that after five years of research, the bank is “close” to release a prototype of its blockchain-based digital currency. Mu Changchun made this statement during the China Finance 40 Forum over the weekend in Yichun, Heilongjiang.

Mu noted that the launch of digital currency using exclusively blockchain architecture in such a large country as China is complicated by the existence of an active retail sector, which requires high productivity and the ability to perform many parallel transactions.

Therefore, the People’s Bank of China used a two-tier architecture to create a digital currency that could serve the “complex economy of a country with a vast territory and large population.” Mu believes that the Chinese digital currency will gain popularity among the country’s population and contribute to the development of innovation among commercial organizations.

Ma noted that the digital currency is designed to meet the needs of “small-scale retail high-frequency business scenarios.”

According to the deputy head of the Chinese regulator, the digital currency will help to substitute cash, but there will not be a fundamental impact on Beijing’s monetary policy.

The People’s Bank of China has been exploring blockchain technology and digital currencies since 2014.

At the end of July 2019, the Chinese central bank already announced plans to accelerate the development of its own digital currency after Facebook announced its plans to launch Libra in 2020. According to Wang Xin, head of the People’s Bank of China’s research bureau, if Libra can be successfully launched, it may challenge the existing United States dollar-centered international monetary system. “But there would be in essence one boss, that is the US dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”