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The People’s Bank of China (PBoC) intends to launch its much-awaited central bank-backed Digital Currency (CBDC) in Shenzhen and Suzhou.
The WHO recommends using digital currencies over banknotes. They suggested this after discovering that the COVID-19 virus could be transmitted through banknotes leading to many central banks speeding up issuing their digital currencies.
Recent reports say that research into China’s central bank digital currency (CBDC) is dragging because of the COVID-19 outbreak. Still, the central bank has completed another milestone in issuing its official digital Currency.
In partnership with private companies, the People’s Bank of China (PBoC) has completed the digital Currency’s essential function. An anonymous company insider said that the PBoC is now drafting relevant laws to allow its circulation.
The central bank has collaborated with seven state-owned companies. According to the local financial news agency, Caijing, four are commercial banks and three telecom giants. But the report did not disclose the name of the partner companies.
Recently, Forbes said that PBoC would be distributed to the digital Currency’s first group. The batch will include; Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, and Chinese banking association Union Pay. Tech giants Alibaba and Tencent are also included.
According to the report, the financial arm of Alibaba, Alipay, had publicized five patents related to China’s official digital Currency at the beginning of the year. According to the insider, the patents concern a digital currency’s primary function, such as its circulation, payment issuance, and anti-money laundering function. He also said that one could Judge from the patents that the first step of technological development has been completed.
The Launch date
The PBoC began its development process in 2014. However, it suddenly accelerated its pace in mid-2019 after the announcement of Facebook’s Libra.
Now People’s Bank of China’s next step is digital currency legislation , banking, and insurance regulators’ supervision. However, this step could be lengthier, making it difficult to come out with an exact launch date.
The Digital currency electronic payment (DC/EP), the PBoC is designing the digital Currency in a centralized way to control its distribution. The usage of digital Currency is believed to be more prominent on an international level.
The cryptocurrency market is gaining traction in various facets of government. Central banks of many other countries intend to bring forth a digital currency. The Bank of France’s governor recently announced its plan to launch a digital currency by next year.