China’s central bank is “almost ready” to issue the country’s own sovereign digital currency, a senior central bank officer said, according to Reuters.
Mu Changchun, deputy director of the People’s Bank of China’s payments department, made the comments on Saturday to a forum held in the northern Chinese province of Heilongjiang.
China’s central bank set up a research team in 2014 to explore the possibility of launching its own digital currency to cut the costs of circulating traditional paper money and boost policymakers’ control of money supply. However it has so far revealed few details of its plans.
Mu said the issuance of the digital currency will rely on a “two-tier” system in which both the central bank and financial institutions will be legitimate issuers.
He also said that the digital currency would not solely rely on blockchain technology as current blockchain technology would not be able to handle transaction volumes in China.
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”