China’s cryptocurrency is ready, says PBoC

12 Aug 2019

The People’s Bank of China has stated that its cryptocurrency “can now be said to be ready."

The bank’s deputy director, Mu Changchun said that a prototype utilising blockchain has been successfully developed following five years of research.

Mu Changchun made the announcement at the China Finance 40 Forum, reported by Shanghai Securities News over the weekend, stating that issuing a cryptocurrency using a pure blockchain architecture would be hard to do in a country as large as China as retailers need high concurrency performance.

In addition, China’s digital currency is going to use a two-tier operating system, Coin Telegraph reports, to cater to the country’s “complex economy with a vast territory and a large population.” 

The People’s Bank of China would be on an upper level, and commercial banks on a secondary level.

According to the PBoC deputy director, this will enhance accessibility, improve adoption rates among the public and promote innovation among commercial entities.

Mu Changchun went on to say that the digital currency is designed to be suitable for “small-scale retail high-frequency business scenarios.”

The People’s Bank of China has been aiming to move ahead of the United States and Facebook’s Libra by launching a national cryptocurrency, as politicians in the U.S. brought a halt to the social network’s stablecoin due to regulatory worries.

Last month, Wang Xin, director of the PBoC Research Bureau said that with the development of Facebook’s Libra, the PBoC should speed up the growth of its own cryptocurrency. Wang said the risks Libra could pose to the traditional financial system will lead to regulators allocating more resources to develop its own digital currency. 

According to the CEO of Huawei, Ren Zhengfei: “China can just issue our own version of Libra. Why should we wait for others to do it? The power of a country is always stronger than that of an Internet company.”

Despite Mu Changchun’s upbeat statements, it is still not clear when China will introduce its digital currency.