With Facebook pushing to create its own coin, Libra, the Chinese authorities are also entering the game. After several years of reported research amid the world’s bitcoin craze, China could become one of the first major economies to release its own cryptocurrency.
The cryptoсurrency of the People’s Bank of China is “close to being out”, a senior official from the financial institution stated at one of the country’s financial forums, Bloomberg reports. Deputy Director of the PBOC’s payments department Mu Changchun said at an event by China Finance 40 Forum that their researchers have been working since 2018 to create systems but did not elaborate about when the Chinese state digital currency will be released.
He is said to have repeated the PBOC’s plans to replace cash in circulation with digital coins rather than M2, which would generate credit and impact monetary policy. The outlet points out that his remarks signal the Chinese central bank is close to formally introducing its digital coin although the reports about their research have been circulating for about five years.
The PBOC stated earlier in August that it plans to “expedite the research of China’s legal digital tender”, keeping an eye on cryptocurrency development both abroad and at home. According to Bloomberg, the Chinese central bank earlier backed oversight of the digital asset, citing risks for the authority of monetary policy, amid Facebook’s push to develop its digital currency Libra.
The Chinese central bank has been holding a tight grip on cryptocurrency since banning ICOs (Initial Coin Offering) from being held and bitcoins and similar currencies from being traded in September 2017. Following this ban, almost 100 cryptocurrency exchanges have been closed. At the same time, China has been considered one of the key digital coin markets, with some reports suggesting that it houses 80% of cryptocurrency mining output thanks to the relatively low prices for electricity in some regions.