[ad_1]
The Chinese central bank denies rumors that it will issue a digital currency by November, saying that Internet giants Alibaba and Tencent will not be the first companies to use its online payment system when it deployed.
The People's Bank of China made the announcement this weekend on its official website, Piyao, which breaks the rumors. He gave little details beyond denying an imminent release of the currency.
Many industry sources and numerous media reported that Beijing was about to unveil the digital payment system and said the process had been speeded up thanks to Facebook's efforts.
FB -1.64%
announces that he would release his own currency, called Libra.
Best new money ideas: Silicon Valley's Last Frontier for Mobile Payments – "The Neoliberal Takeover of the Human Body"
China would become the first major country to publish a digital version of its currency if it were released.
It is also unclear whether the apparent carry is the result of a reworking at the PBOC. Two weeks ago, veteran central banker Mu Changchun was promoted to the head of the PBOC's Digital Currency Research Institute. Mu was a strong supporter of the currency and last month he declared that she was "about to be released".
Mu also said in August that the currency would be based on a two-tier system similar to that used to produce minted currency, the PBOC producing and managing the currency, then sending it to commercial banks and other entities, which then distribute it to consumers.
But unlike Bitcoin
BTCUSD, -0.49%
China's digital currency is unlikely to rely on blockchain technology, he added, which may not be able to support the huge volume of transactions at any given time.
China's creation of its own digital currency was led by a former central bank governor, Zhou Xiaochuan, who retired last year. Although many transactions in China are already digital – thanks to Alipay and WeChat – PBOC officials would have worried that emerging online currencies could make the country vulnerable or reduce government control over emissions.
Mu echoed Zhou's comments over the summer that different agencies should be competing for acceptance of the technology being used, and that several government institutions were developing their own road maps for the payment system. We also do not know if this inter-agency competition is at the center of the delay.
Unlike the United States and much of Europe, China has far surpassed the era of credit cards, with payments moving from cash to digital portfolios to Alipay and Tencent. Alipay, which is led by Alibaba
Baba, -3.03%
Affiliate, Ant Financial, currently processes about half of China's mobile payments, while
TCEHY, + 0.23%
700 -0.18%
WeChat Pay manages a little less than 40%, according to the research firm Analysys based in Beijing.
The widespread adoption of mobile payments in China means that it is unlikely that consumers will experience significant disruptions once the digital currency has been rolled out. Most of the changes will affect levels of government and lending, which will allow institutions to better control the issuance and monitoring of trade and could help detect money laundering and other illicit activities.
Continue reading: How to invest – or avoid – what makes China, China
Tanner Brown is Director of Real Time Information at Caixin Global in Beijing.
[ad_2]
Source link