- PBoC will control the proposed cryptocurrency
- They could link the digital currency to WeChat and AliPay
- PBoC is concerned about Facebook’s Libra’s threat
China may be planning to launch its own digital currency. The centralized cryptocurrency will enable the government and the Central Bank to monitor people’s spending habits.
Tightly Regulated Electronic Cash System
According to a report on The Singapore Times published on October 15, 2019, the digital asset will differ from your ideal decentralized cryptocurrency that’s designed on the premise of anonymity enabling users to buy and sell without leaving a digital trace. China’s proposed cryptocurrency is likely to be a tightly regulated electronic cash system that will be run by the People’s Bank of China (PBoC). Commenting, a Beijing-based analyst firm Trivium China stated:
“It would give the PBoC greater insight into transactions throughout the country.”
Speculation about a Chinese proposed digital currency, which analysts believe the digital currency could become launched on November 11 during the Single’s Day holiday, has been rife for a while now. China’s Central Bank Governor Yi gang saying last September the country’s new currency could be associated with existing e-payment systems such as Alipay and WeChat phone Apps which enable Yuan Transactions via bank accounts. Yi stated:
“We will not predetermine the technical path […] we may consider blockchain technology or another technology that evolves from existing electronic payments.”
Concerned about Facebook’s Libra
The new development by China comes at a time when social media giant Facebook has forged ahead and named a five-member board to oversee its Libra cryptocurrency with the support of 21 remaining backers despite last-minute defections. Members attending an inaugural meeting in Geneva, Switzerland agreed on interim articles of association laying out how the organization will be governed, as required by Swiss law, according to a fact sheet provided by the Libra Association. Libra, part of Facebook’s expansion into e-commerce, will be backed by a reserve of real-world assets, including bank deposits and short-term government securities, and overseen by the Libra Association.
The PBoC earlier this week advertised at least half a dozen positions crypto which analysts believe is tied to the banks push for their own digital currency. The bank noted in its bulletin the prospective experts must be well-versed in mainstay crypto-economy fields like cryptography and computing and preferably have experience in niches like cryptocurrency analysis and blockchain development. PBoC could be concerned that Facebook’s dollar-centric Libra could pose a threat to the yuan, according to remarks made by the bank’s research division director, Wang Xin, this summer.
“There would be in essence one boss that is the U.S. dollar and the United States.”