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China’s sovereign digital currency is “almost ready,” says central bank official

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China's sovereign digital currency is "almost ready," says central bank official
China’s central bank is "almost ready" to issue the country’s own sovereign digital currency. This was announced by a spokesman for the People’s Bank of China.
Mu Changchun, deputy director of the payments department of the People’s Bank of China, spoke Saturday at a forum held in the northern Chinese province of Heilongjiang. He recalled that back in 2014, China’s central bank assembled a research team to study the possibility of launching its own digital currency. The goal of the development was to reduce the cost of circulation of traditional paper money and increase politicians’ control over the money supply. But only now are the authorities ready to reveal some details.
Mu said that digital currency issuance would rely on a "two-tier" system in which both the central bank and financial institutions would be legitimate issuers. He also stressed that the digital currency would not rely entirely on blockchain technology, as the current state of this technology would not be able to process all transactions in China.
The exact release date of China’s own cryptocurrency has not yet been named. Moreover, the Chinese authorities are still doubting the feasibility of creating their own cryptocurrency.
For example, Guo Yeyong, director of the Banking Research Center at the Central University of Economics and Finance in China, told RIA Novosti that "low-quality" money will displace "high-quality" money – i.e., fiat. At the same time, he believes that the issue of digital currency in the future will contribute to the internationalization of the yuan.
"The digital currency promotes the concrete application of the renminbi, making it more user-friendly. In the long term, this will contribute to its further internationalization of the yuan, " the expert believes.
Earlier, in late July, the intent of the to accelerate the development of digital money another Chinese official, Wang Xin, director of the research bureau of the People’s Bank of China (PBOC), said. He stressed that accelerating the launch of the state-owned cryptocurrency could serve as a "counterweight" to the Facebook Libra project, which Chinese authorities consider a serious threat to financial stability. Zhou Xiaochuan, former chairman of the People’s Bank of China (PBoC), said that the very concept of a global digital currency that can be exchanged for fiat "threatens existing payment systems and could weaken the position of national currencies."

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