China’s Central Bank is in the process of launching its own cryptocurrency according to an official representative from the government. An article published by Bloomberg today, reports that Mu Changchun, Deputy Director of the payments unit at the PBoC, stated at a recent public event that “its researchers have been hard at work since last year to complete the systems needed to support the digital Yuan offering and that it is close to being out”.
The announcement did not come as a surprise due to the fact several Chinese officials agree that Libra, the cryptocurrency launched by the American giant, poses a significant “threat”. PBoC Governor, Z. Xiaochuan affirmed in mid-June that “Libra poses a threat to payments systems and national currencies”. Thus, the development of the Libra project has pushed the urgency for an Asian rival that can outperform Facebook’s stablecoin.
In a statement released in early July, the Central bank commented that: “It is without a doubt that with the announcement of Libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets”.
In the comments made by Mu Changchun on his speech, the Deputy Director emphasises that the Chinese digital currency will serve as M0, which in economics means all the bank reserves, the monetary base or narrow money. Besides, the cryptocurrency is expected to enhance the use of the Yuan regionally and internationally by ensuring circulation and liquidity.
As secondary aims, the coin is expected to make the Chinese Yuan stronger in the current trade-war outlook as well as provide the ground for making Beijing more accountable regarding its financial system.
The last patents filed by the Central Bank of China also describes the features related to the very expected cryptocurrency. Users are going to be able to download a mobile wallet and convert their Yuan directly in the app.
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