The development of the digital currency planned by People’s Bank of China (PBoC) continues at full speed. According to CoinDesk’s confidential sources, the plan is for it to be released before Libra enters the market.
A dedicated team from the central bank’s Digital Currency Research Laboratory is now developing the system in a separate facility with restricted access. Apparently, activity has been accelerating since the beginning of summer, when Facebook launched the Libra whitepaper.
The crypto project supported by Facebook and 28 other major companies has alarmed governments around the world. After the first moments of panic, some economists, such as the Governor of the Bank of England, Mark Carney, came to the conclusion that the solution is that central banks should adopt the concept of digital currency globally.
But China seems to have a breakthrough in this regard, as it is already working on a centralized digital currency.
Unconfirmed rumors about the release date
According to a September 4 report published by the China Daily news agency, the “closed system testing” for the central bank’s digital currency (CBDC) has already begun. The tests simulate payment scenarios involving “some commercial and non-governmental institutions”.
If things go well, the project could be launched sooner than Libra, which targets the first half of 2020, China Daily reported earlier.
Forbes reported last week that seven major organizations, including four state-owned commercial banks in China, as well as fintech giants Alibaba, Tencent and Union Pay will be the first organizations to receive CBDC.
A few hours after the Forbes report, Chinese publications Tencent News and Sina said the information presented was “inaccurate speculation”, citing people close to the central bank.
So far, no official statements on the subject have been published, and the participants have signed confidentiality contracts.
Chinese Digital Currency – Initial launch in Shenzhen possible
China’s Global Times said last week, citing industry sources familiar with the issue, that the Chinese digital currency will initially be launched in the Shenzhen region. This is the economic area where local companies, including Tencent and state financial institutions, are researching technical frameworks to support CBDC development.
The PBoC Digital Currency Research Laboratory has previously launched an entity called Shenzhen Fintech Research Institute, dedicated to the development of fintech and digital currency projects.
The Institute has also hired various technical experts, including blockchain architects and cryptocurrency specialists, who will work in Shenzhen and Beijing.
PBoC’s digital currency research lab has filed more than 50 patent applications to detail the potential design of the state-backed digital yuan.
Based on these patents, the Chinese digital currency will require a peer-to-peer trading system, but will eliminate most of the features of cryptocurrency anonymity and decentralization.
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