According to recent reports in the media, the Peoples Bank of China is stepping up its efforts to introduce its digital currency with the deputy director of PBOC Mu Changchun saying, “its close to being out." While not revealing any specific timeframe for the introduction of their digital currency, they did say that it would be a replacement for cash that's already in circulation and would support the yuan's circulation.
The currency has been in development for around five years now and echo's what is currently happening in Europe with Sweden’s central bank also looking to introduce their own digital token as we reported on recently.
Electronic payment methods are already widespread in China with mobile payment apps, which handle trillions of dollars’ worth of payments per quarter, are eroding the need for using cash. At first glance, it might seem counterintuitive for China who has clamped down on ICO's and Bitcoin mining to introduce their own digital currency. However, a closer look at the patents PBOC have registered reveals that they might just be giving the current generation what they want, the ability to use digital currencies but they are also maintaining control of their new digital currency. This is an amazingly forward-thinking move which comes as regulators around the globe express concern about Facebook's upcoming Libra.
Users would have to install a mobile wallet similar to the Dragon Social Wallet (DSW) and exchange yuan for the new digital token – whether wallet to wallet transfers will be free as they are with DSW to DSW is yet to be seen. Once installed, consumers could then exchange yuan for the digital token and then make and receive payments with the central bank of China, tracking every time any funds are transferred or received. Mu also said that the new digital tokens could even be used without an internet connection but did not elaborate on the technical design behind this.
But one thing is certain, and that is that these plans once again showcase China’s fantastic vision. The combination of strong traditional values and modern innovative technologies are set to bring further wealth and prosperity to the Chinese economy. And by retaining control of its digital currency, China is ready to embrace the tremendous opportunities of Blockchain technology and break free from the currency manipulation from third parties.
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