It’s been public knowledge for several years that China has embarked on developing a digital currency. However, details about this initiative have been scarce, as the Chinese authorities largely remained tight-lipped until recently about their upcoming digital national asset.
Nonetheless, as the countdown to launch inches forward after years of development, Chinese officials are now offering tangible details about what they call the Digital Currency Electronic Payment system — or DC/EP for short.
Chinese Authorities Spill the Beans on Their Digital Currency Plans
As reported by the South China Morning Post, citing a source from a Shanghai media outlet, Mu Changchun, who heads the digital currency research branch of the People’s Bank of China, has publicized several insights into the DC/EP initiative.
During a Saturday gathering, Mu discussed the nature of this new digital currency, stating it would essentially be 'a digital iteration of the yuan,' implying it isn't designed for speculative markets and won't require backing from a consortium of global currencies, like Facebook's proposed Libra project.
Mu clarified, 'Our currency isn’t meant for speculative purposes. It's distinctly different from Bitcoin or stablecoins, which invite speculation or require support from other currencies.'
He also assured that most foundational aspects of the project’s development have reached completion. This comment follows his earlier remark that there isn’t a definitive timeline established for launching the project.
DC/EP Pilots On Their Way
Mu’s statements came in light of reports suggesting that the People's Bank of China is ready to start DC/EP trials in particular areas.
In case you missed it, earlier this month, a Chinese finance news source, Caijing, indicated that the central bank plans to trial DC/EP in Shenzhen and Suzhou, the prior being renowned as China's own Silicon Valley. reported The first phase of trial is predicted to commence in the upcoming weeks, leading to a second phase that will aim to broadly introduce the digital currency in these cities throughout 2020.
According to Caijing, based on their gathered details, the project has seen a partnership between the PBOC and seven significant state-owned enterprises, comprising four Chinese commercial banks and three large telecom enterprises.
An insider familiar with the pilot venture disclosed that while the PBOC’s directions to the banks have been somewhat ambiguous, they have encouraged these financial entities to innovate in promoting the adoption and potential advantages of DC/EP.
Despite the vague guidelines, Caijing pointed out that the pilot will prioritize penetrating industries such as transport, education, and commerce.
This move aligns with China's broader enthusiasm for blockchain, capped off by President Xi Jinping’s recent declaration during an assembly with top political figures about integrating blockchain as key infrastructure technology in the republic.
All In On Blockchain
This resonates with reports indicating that major Chinese businesses are adopting ledger technology. For instance, another example is
the Bank of China recently conducted a blockchain-facilitated issuance of 20 billion yuan (approximately $2.8 billion USD) in bonds designed for small and micro enterprises. previous reports from Blockonomi, Additionally, ByteDance, the company behind the polarizing TikTok app, is
collaborating with a government-affiliated entity. venturing into blockchain Official business registration data from the National Enterprise Credit Information Publicity System reveals ByteDance holds a 49% stake in a new partnership via a 10 million yuan investment.
The remaining ownership of this new venture belongs to Shanghai Dongfang Newspaper, a state-owned media organization well-known for its popular digital news platform in China.
I am a writer with insights into the world of cryptocurrencies since 2013. My analyses and discussions have appeared across high-profile sources in the sector like LongHash, NewsBTC, and Decrypt. When not immersed in writing, I am part of HTC’s EXODUS team, a division within the Taiwanese tech company. I'm also a small-scale Bitcoin owner. Feel free to reach out to [email protected]
