Digital currency won’t come as early as speculated: China's central bank

Source:Global Times Published: 2019/9/22 20:08:40

Digital currency won’t come as early as some rumors suggest: PBC

A view of the PBC building in Beijing Photo: VCG

The People's Bank of China (PBC), the central bank, has said that media reports about launching a national digital currency in November are "inaccurate speculation."

Information including the launch time and participating institutions that has circulated online since the end of August is "inaccurate," according to a statement on China's official rumor refuting platform on Saturday.

The clarification came after speculation said that the PBC will launch a digital cryptocurrency as early as November 11, and the cryptocurrency will be issued to China's four biggest commercial banks, as well as Alibaba, Tencent and bankcard company UnionPay at the initial stage.

Progress on a digital currency will be announced in due time, the central bank said, asking the public to follow official notices.

The clarification shows the rigorous and responsible attitude held by the PBC as the first central bank in the world that is exploring the significant financial technology innovation in a timely way, Zhou Yu, director of international finance under the Shanghai Academy of Social Sciences, told the Global Times on Sunday.

The PBC noted in the latest clarification that China's new digital currency will have essential differences with virtual currencies like bitcoin, adding that the currency will use a centralized management model. The PBC's digital currency will be legal tender backed by state credit.

It will also be different from current e-wallets or online payments. The new digital currency will not replace the current yuan system; instead, it will be a digitalized yuan, the clarification said.

The PBC will introduce a two-pronged operation system for the digital currency, adopt a centralized management model, and continue to use its current operation structure for cash services, through joint efforts of the PBC and commercial institutions, the statement said.

China's new digital currency will be convenient for circulation. It can be used in small amounts in retail business scenarios, and ease people's payments in daily life, the clarification added.

The clarification didn't say if the new digital currency would be developed on the basis of blockchain technology like other non-centralized virtual currencies.

The technology route of the PBC's digital currency is still at the stage of market competition, and the final choice is yet to be made, according to a PBC official's speech published on August 21 on the PBC's WeChat account.

The technology design of the new national digital currency at least should meet the requirement of high concurrency from the retail sector, like 300,000 transactions per second, said Mu Changchun, deputy director of the Payment System Department of the PBC, adding that the technology won't necessarily be blockchain.

Even if the technology route is decided, such an epochal digital currency still needs more time to test its stability and safety, Zhou said.

Newspaper headline: Digital currency won’t come as early as some rumors suggest: PBC


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