The last week has seen a lot of speculation regarding how China will proceed with its cryptocurrency and blockchain policy. Now, a Chinese think tank executive is arguing that China will be the first nation in the world to successfully launch a digital currency.
China developing SWIFT replacement
Specifically, this news comes from the Chinese technology news outlet Pandaily. According to the news report, the vice chairman of the China Center for International Economic Exchanges – Huang Qifan – believes that China’s central bank will take home the global race for releasing the first central bank digital current (CBDC).
Furthermore, Huang made these comments during the 2019 Inaugural Bund Financial Summit in Shanghai. Moreover, his comments came just days after Chinese president Xi Jinping urged the Asian nation to accelerate its blockchain efforts.
Furthermore, many analysts believe that this led to the dramatic increase in the price of Bitcoin since seen. Additionally, others have worried that China may now gain superiority within the blockchain field, and Huang’s comments seem to suggest that China will lessen its dependence on other nations.
Launching a ”digital renminbi”, i.e. a Chinese CBDC, would create new opportunities for cross-border financial exchanges, according to Huang. Huang also said that he was dissatisfied with current international trade systems, namely dependence on SWIFT and CHIPS systems.
Is a Chinese CBDC imminent?
This is a complaint that many within the cryptocurrency and blockchain industry have previously lifted. The dependence on these legacy systems are, according to Huang, challenging both due to technical limitations and political ones. Huang went on:
”SWIFT is an outdated, inefficient and costly payment system. Since the establishment of SWIFT 46 years ago, the technology has been updated slowly and the efficiency has been relatively low.”
If China will actually create and release a sovereign CBDC, this will dramatically lessen the nations dependence on other financial systems. Nevertheless, the launch date of a Chinese CBDC has hitherto been somewhat unclear.
This August, reports first emerged that a launch of a Chinese CBDC was imminent. However, this never came to be – and in September, the central bank said that China had ”no specific launch date in mind”.
Some reports suggest that China is currently hard at working testing and evaluating the CBDC, to prevent potential risks. Nonetheless, these recent comments by Huang seem to suggest that Chinese think tanks familiar with the matter believe China will nevertheless release the world’s first CBDC.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.