China’s central bank, the People’s Bank of China (PBoC), reports that it is “progressing smoothly” with its development of a government-backed digital currency.

The bank issued its statement during a working conference held in Beijing from Jan. 2–3, according to an official news release published yesterday, Jan. 5.

Five years in the making

As reported, China has devoted five years of research and system development work to its forthcoming central bank digital currency (CBDC), and proceeded to conduct its first real-world pilot of the currency in Dec. 2019.

As a form of digital legal tender — and unlike a private, decentralized cryptocurrency — the CBDC will be controlled by the PBoC and 100% backed by the reserves commercial institutions pay to the institution.

As noted, the PBoC made its brief statement on its progress with the digital yuan as part of a conference devoted to “studying and implementing the spirit” of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, held in Oct. 2019, and December’s annual Central Economic Work Conference.

With speeches by PBoC President Yi Gang and the Chinese Communist Party Secretary Guo Shuqing, the conference summarized the PBoC’s work in 2019 and outlined the bank’s key tasks for continuing to develop “socialism with Chinese characteristics” in 2020.

The bank’s 2020 remit under the aegis of the Party Central Committee and the State Council will include making “countercyclical adjustments” to monetary policy, tackling financial risks, and pursuing an ongoing liberalization of the national economy.

Beijing and the global blockchain sector

The impact of China’s digital reminbi and state-led blockchain strategy on existing decentralized protocols remain moot. Analysts are closely watching Beijing for clues as to its evolving stance in terms of interoperability, censorship, international strategy and regulation.

In an interview with Cointelegraph, Wulf A. Kaal — Ph.D. at tech consulting firm Kaal.io — echoed earlier remarks by Ethereum co-founder Joe Lubin: