China to Replace Yuan with Cryptocurrency

 China has revealed its plans to launch a national digital currency to replace the cash circulating in the country.

The Chinese Bank of the People (PBOC) revealed on August 15 that China has ambitions to launch a cryptocurrency. The revelation came without specifying the time of the launch. China has begun working on its digital currency since 2014, and has filed 80 patents in the process.

PBOC is China’s central bank that runs the country’s monetary policy.

In a communiqué, PBOC explained that the new Chinese cryptocurrency would have its own specificities that distinguish it from other cryptocurrencies online. Mainly, it will have indexation with the Chinese currency, the Yuan.

The Governor of PBOC, quoted in the French-speaking news source Chine Magazine, says that the Chinese government has plans to use the new cryptocurrency to completely replace the cash circulating in China.

Digital payments have been growing in China since their introduction. Alipay has recorded a dazzling 600 million average monthly users, more than twice that in the US.

Roger Huang, a contributor at Forbes, stated that the news of the Chinese cryptocurrency may seem like good news for cryptocurrency in general. However, there are differences between this new virtual currency and the lately announced Facebook’s Libra for example. Huang argued China meant for this currency to be some sort of “digital cash with extra surveillance.”

Huang’s conclusions come from a number of facts that came with the announcement. First of all, the Chinese cryptocurrency will only be issued by the state-owned PBOC. Second, PBOC will have end-to-end control and tracking of the transactions and records since they will design all the digital wallets (in the form of mobile apps). And third, China attempts to unify all the cryptocurrencies in China under one state-controlled virtual currency.

International Casablanca
International Casablanca
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