China takes one step closer to launching its own digital currency as an official at China’s central bank states that their institution is nearing the launch period.
Mu Changchun, the deputy director of payments at the People’s Bank of China (PBoC) said over the weekend that their researchers have been hard at work in order to release the digital currency. According to Changchun work has been underway for the past year, focussing on completing the systems required to support the digital Yuan service and now it is ‘close to being out’.
Even though development has been ongoing for the past 5 years, the Chinese have increased intensity of its digital asset interest since Facebook released a Libra Whitepaper earlier this year.
Like other international centralized banking entities, PBoC have also voiced their concerns over Libra. Last month Zhou Xiaochuan the former governor of PBoC stated that Libra poses a threat to payments systems and national currencies. Zhou also reiterated that the Chinese government should ‘make good preparations and make the Chinese yuan a stronger currency.’ It appears this is now well under-way.
From comments made by Mu over the weekend, PBoC’s digital currency is designed to replace or substitute M0 currency, this includes coins and notes in circulation but not M2 (bank deposits). In doing so, circulation of the Yuan could be boosted dramatically, both locally and internationally.
According to the patents registered by PBoC, both consumers and businesses would download a mobile wallet where they could swap their yuan for the digital money. This wallet could then be used to make and receive payments whilst allowing PBoC to track every transaction. This example highlights decentralized technology controlled by a centralized agency.
According to a Bloomberg report, PBoC’s developers have registered 78 digital currency patents since 2016.