Altcoin News: People’s Bank of China Confirms Readiness to Launch Digital Currency on Blockchain

August 12, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

A senior official from the People’s Bank of China on Saturday confirmed that the state will soon have its own digital currency, writes The Block.

Mu Changchun, Deputy Chief in the Payment and Settlement Division of the People’s Bank of China, said that a prototype of the digital currency issued by the central bank (CBDC) already exists, and the digital money research group has fully developed the blockchain architecture for it. China’s CBDC will not be based on the blockchain alone, as this would prevent its distribution in retail payments.

Changchun noted that the department has been conducting research and development since 2014.

“The People’s Bank of China is the upper level and the commercial banks are the second level. This dual delivery system is suitable for our national conditions. It can use existing resources to mobilize the enthusiasm of commercial banks and smoothly improve the acceptance of digital currency.”

A two-tier system is preferred for China because of its complex economy, vast territory, and high population.

“From the perspective of improving accessibility and increasing public willingness to use, a two-tier operational framework should be adopted to deal with this difficulty,” Changchun said.

He also praised the resources, including labor, and the innovative capabilities of commercial enterprises, which would express their willingness to cooperate with the regulator in the process of launching a digital currency.

Chairman of China’s national payment system UnionPay, Shaofu Jun, in connection with the latest announcement, noted that it will not be easy to ensure the fulfillment of the goals stated by the People’s Bank of China.

Although CBDC is able to solve certain problems of cross-border payments, long delay intervals, low efficiency of traditional systems, insufficient certainty of the operational process and regulatory principles in foreign countries can have a negative impact on the implementation of the initiative.

Author: Marko Vidrih