Interest could be due to the bitcoin surge, according to PBOC



[ad_1]

A man counts 100 renminbi banknotes with the Chinese flag in the background.

Sheldon Cooper | SOPA Pictures | LightRocket | Getty Images

GUANGZHOU, China – Interest in the Chinese digital yuan project may in part be driven by soaring bitcoin prices, China’s central bank said on Thursday, even as cryptocurrency is effectively banned in the world’s second-largest economy .

The Chinese digital yuan is an example of a central bank digital currency (CBDC) that aims to replace a portion of cash in circulation.

The People’s Bank of China (PBOC) sees this as a way to advance cashless payments. It is actually a digital version of fiat money. The central bank has been working on a digital currency since 2014.

Speaking to reporters, Wang Xin, director of the PBOC’s research bureau, said that the market’s interest in the digital yuan was “very strong and everyone was paying close attention.”

“On the one hand, this has to do with the fact that more and more central banks around the world are participating in the development of national digital currencies,” Wang said, according to a CNBC translation of his Mandarin commentary.

A number of central banks around the world – including Japan, the UK, Sweden and Switzerland – are considering issuing their own digital currencies. China is arguably the most advanced.

“On the other hand, this (interest) may also be related to the sharp rise in the price of bitcoin,” Wang said.

The price of bitcoin has hit record highs several times in recent months. This year alone, it has more than doubled.

But the Chinese digital yuan is not like bitcoin.

The latter is a so-called decentralized cryptocurrency, which means that it has no central authority – like a central bank – to control it. Bitcoin also works on a technology called blockchain and it is not clear at this point what the digital yuan will be based on.

We will go ahead with digital RMB pilots and accumulate more experience.

Wang xin

Research Office Director, People’s Bank of China

Other upcoming digital yuan pilot projects

So far, the PBOC has not given a timeline for the national deployment of the digital yuan. But he has carried out a number of real-world pilot projects in cities in China.

These often take the form of lotteries where residents of these cities can apply for a share of a digital yuan pool and then spend it at participating retailers.

During the Chinese Lunar New Year in February, authorities distributed around $ 1.5 million in Beijing. Other major cities, including Shenzhen and Chengdu, have had their own trials.

Wang said that the pilots and are “more and more and also expanding.” He hinted at other trials to come.

“Then we will go ahead with the digital RMB pilots and accumulate more experience,” he said.

[ad_2]

Source link