Chinese digital currency is ready after five years of development

Chinese digital currency is ready after five years of development

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Representatives of the People’s Bank of China said that soon their own digital currency will be launched in the country. It is reported by The Block with reference to Shanghai Securities News.

So, the deputy head of the payment unit within the People’s Bank of China (NBK) Mu Changchun said that there is already a prototype of the digital currency, and the department’s research group has fully worked out the blockchain architecture for it.

The bank-issued digital currency (CBDC) will not be entirely based on the blockchain. According to representatives of the central bank, this approach makes CBDC bandwidth sufficient for retail payments.

Changchun emphasized that CBDC has been under development since 2014, but “now we can say that it is almost completely ready.” It is noteworthy that the digital currency of the NBK involves the use of a two-level system: the base layer is the central bank, the second level is commercial banks.

The NSC representative added that such an architecture is most suitable for the Chinese economy. CBDC, he said, is designed to reduce various risks in the country’s financial system, increasing its effectiveness.

During a meeting of China Finance 40 Group, UnionPay payment system representative Shaofu Jun said that the launch of CBDC will certainly be fraught with various difficulties.

So, despite the fact that the digital currency issued by the state can be effectively used in cross-border payments, the operational and regulatory risks at the global level are still high.

Recall that the former head of the Chinese central bank Zhou Xiaochuan called Facebook’s Libra a threat and called for accelerating the development of the digital renminbi.

Also recently, Huawei founder Ren Zhengfei said that China should release its own analogue of the currency Libra.

Chinese digital currency is ready after five years of development

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