Deputy Director Mu Changchun said that PBoC’s digital currency “can now be said to be ready,” he told the news outlet, and a prototype was successfully developed that uses the blockchain architecture. He was unclear, however, when the digital currency might actually launch.
Changchun made the announcement at the China Finance 40 Forum. He said in addition to blockchain, the digital currency will have a two-tier operating system to cater to China’s “complex economy with a vast territory and a large population.” He added that this will improve accessibility and adoption rates among the public, as well as promote innovation.
The digital currency is intended for “small-scale retail high-frequency business scenarios,” he said. It won’t mimic crypto because it uses a more complex structure.
PBoC has said that the possible launch of Facebook’s Libra could speed up the bank’s development of its own digital currency. If Libra becomes widely used for international payments, Wang Xin, head of the research bureau at the PBoC, questioned “would it … accordingly have a large influence on monetary policy, financial stability and the international monetary system?”
As a result, Wang said PBoC has been giving the situation “high attention.”
“We had an early start … but lots of work is needed to consolidate our lead,” Wang said at an event at Peking University’s Institute of Digital Finance July 8. He didn’t reveal when it will be ready to hit the market.
PBoC hosted a video conference on Aug. 2 to discuss its priorities for the second half of 2019, saying cryptocurrencies will be closely monitored. It suggested that it should accelerate the research and development of its digital currency. Additionally, the bank said that it should strengthen financial risk remediation as well as its policy propaganda interpretation and respond quickly to social concerns.