The People’s Bank of China, China’s central bank, recently made a claim that it has now got a “ready” digital currency. This comes as the People’s Bank of China has been working on a blockchain solution for multiple years.
China’s central bank reveals that its digital currency is “ready”
Specifically, the Deputy Director of the People’s Bank of China, Mu Changchun, commented on this new digital currency. His comments came during the China Finance 40 Forum, and were first covered by Shanghai Securities News.
Moreover, Mu said that the digital currency can now be thought to “be ready”, following five years of research on blockchain architecture and developing a prototype solution.
In addition to this, Mu explained that issuing a digital currency using a “pure blockchain architecture” would be difficult to do, especially in a country the size of China. Mu argued that the principal barrier to doing this would be that retailers demand “high concurrency performance”.
The upcoming digital currency will supposedly use a two-tier operating system. This will see the People’s Bank of China handle the “upper” tier and commercial banks on the secondary tier.
Is the release of a “digital yuan” imminent?
This two-tier system was supposedly chosen due to China’s “complex economy with a vast territory and large population”. Furthermore, Mu argued that this will additionally boost public adoption, accessibility, as well as innovation for commercial organizations.
This national digital currency is supposedly developed specifically to suit the needs of “small-scale retail high-frequency business scenarios”. Put simply, this appears to indicate that the currency will be suitable for real-world usage.
News of a “digital yuan”, or whatever name this Chinese digital currency ends up having, have intensified these past days. In a video conference on August 2nd, the People’s Bank of China announced that development of a digital currency was being dramatically accelerated and allocated more resources.
This comes as Facebook’s crypto project, Libra, is facing intense scrutiny and regulatory pushback in the United States. As such, some are speculating that China is now attempting to beat Libra to market by issuing a national cryptocurrency.
Although Mu notes that the digital currency “can now be said to be ready”, it is not clear when the currency will make it to market. Nevertheless, seeing swift progress be made on this national digital currency is still promising.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain 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.