China plans to issue its own digital currency similar to Facebook’s Libra coin

More details have emerged around China’s plans to issue its own digital coin following a lecture given by a senior official at the central bank.

Mu Changchun, deputy director of the People’s Bank of China (PBoC), told delegates that the new digital currency would be similar to Facebook’s Libra coin in design terms and would be eligible for use on major payment platforms and e-commerce networks such as WeChat, TenCent and AliPay.

Changchun also said that the central bank’s objective was to strike a balance between allowing anonymous payments but upholding anti-money laundering rules. He also said that a thriving digital currency would help China maintain its foreign exchange sovereignty as the commercial application of virtual currencies develops.

„Why is the central bank still doing such a digital currency today when electronic payment methods are so developed?” said Mu, according to a transcript of the lecture reported by state-run newspaper Shanghai Securities News. „It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day.”

He also offered assurances on the security of the digital coin, stating that the tokens would be as safe as central bank-issued paper, safeguarded against the threat of bankruptcy unlike commercial cryptocurrencies, and can be used without an internet connection. 

The PBoC set up a research team back in 2014 to explore the idea of a digital currency nbut little was heard until last month when Changchun revealed that the new coin was close to launch. It has subsequently been reported that it could be released as early as November 11.

Speculation has mounted that the PBoC has accelerated its plans following the announcement by Facebook of Libra, its digital currency plan.