Speaking at an event in China, Mu Changchun, deputy director of the payment unit of People’s Bank of China (PBoC) said its researchers have been working hard since last year to complete the necessary systems to Support the digital yuan. Bloomberg reported the news.
Since Facebook announced details of its cryptocurrency project Libra in mid-June, China has seen the development of its digital currency as a new urgency.
In early July, former People’s Banc Of China (PBoC) governor Zhou Xiaochuan said that Libra represents a threat to payment systems and national currencies.
As such, he argued that the Chinese government should “do good preparations and make the Chinese yuan a stronger currency”. Zhou further suggested that “commercial entities” be
could allow them to issue digital yuan, like Hong Kong what lets with your dollar.
Almost at the same time, Wang Xin, head of the investigation office of the People’s Bank of China said that the central bank has been looking at the situation in Libra with “great attention” and could accelerate the development of your own digital currency.
In his comments of the last September, Mu reiterated the digital currency would boost circulation of the yuan, even internationally, he added.
As previously reported, the large number of patents presented by the Popular Bank of China related to your digital currency paint a picture of how you could function. They suggest that the work addresses a technology that emits a digital currency, as well as provides a wallet that
stores and performs asset transactions in a manner “of end to end. “
Patents indicate that the wallet would store a digital currency issued by the central bank or any authorized central entity that is encrypted as a cryptocurrency with private keys, offer multiple signature security and be maintained by users in a decentralized manner.
At the last count, 52 patents have been filed under the name of Digital Currency Research Lab of the PBoC, and the latest published on October 9, 2018, was presented on March 26, 2018.
Two level system
The cryptocurrency project will be based on a two-level system, that is, the PBOC will issue tokens to commercial banks and other financial institutions of the country, which will distribute them for use public.
A single level system would be for the central bank to launch tokens directly to the public.
The China project is not a decentralized offer based on blockchain and intends to give Beijing more control about finance.
It is worth noting that while the PBOC is developing its own digital currency, initial coin offerings (ICOs) and cryptocurrency transactions are still prohibited in the country.