China’s Central Bank Gears Up to Launch it’s Own Cryptocurrency

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Not long after Facebook announced details of its Libra cryptocurrency project,  it appears that China is ratcheting up to release its own national cryptocurrency.  China’s central bank is nearly ready to issue the country’s own sovereign digital currency, a senior central bank official told a forum held at the China Finance 40 Forum over the weekend in Yichun, Heilongjiang. 

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Mu Changchun, deputy director of the People’s Bank of China’s (PBOC) payments department, told Reuters that the issuance of the digital currency will rely on a “two-tier” system in which both the central bank and financial institutions will be legitimate issuers adding that the digital currency would not solely rely on blockchain technology as current blockchain technology would not be able to handle transaction volumes in China.

According to a Bloomberg report written by Yinan Zhao and Eric Lam Mu repeated the PBOC’s intention that the digital currency would replace M0, or cash in circulation, rather than M2, which would generate credit and impact monetary policy. The digital currency would also support the yuan’s circulation and internationalization, he added.

Don Guo, CEO of Broctagon Fintech Group, commented on the news:

“It will be interesting to see how this shakes up the market. It’s great to see a positive governmental move towards crypto, given other major economies such as the US and India are taking steps to stifle cryptocurrency adoption. It’s clear that China understands the opportunity cost of missing out on crypto growth.”

Digital currencies are coming into the mainframe and international competition is heating up. Economies risk being disadvantaged if they are left behind.  This new currency could even rival Facebook’s notorious proposed cryptocurrency, Libra. This is largely because Facebook is not permitted in China, giving the government a potential monopoly over the market.  Looking ahead, China is well-positioned to get ahead of the game and take up a leading position in one of the key asset classes of the future.”

“Although a certain level of regulatory scrutiny is wise, other countries should consider taking China’s lead. Whether regulators like it or not, the adoption of digital currencies will continue. Just last week, Bitcoin shot to new heights and was even treated as a safe haven asset during sell-offs over recession fears. It’s a positive sign of things to come.”

Dave Chapman, executive director at BC Technology Group Ltd. told Bloomberg:

“It is without a doubt that with the announcement of Libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets,” said  They have to consider the possibility that non-government issued currencies could “dramatically” disrupt finance and payments.”

Earlier in July, Coindesk reported, on a large number of patents filed by the PBoC relating to its digital currency paint a picture of how it might work. 

“The patents indicate the wallet would store a digital currency issued by the central bank or any authorized central entity that is encrypted like a cryptocurrency with private keys, offers multi-signature security and is held by users in a decentralized way.”

At the latest count, there have been 52 patents filed under the name of the Digital Currency Research Lab of the PBoC, with the latest published on Oct. 9, 2018, having been submitted on March 26. 2018.

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About Richard Kastelein

Founder and publisher of industry publication Blockchain News (EST 2015), a partner at ICO services collective Token.Agency ($750m+ and 90+ ICOs and STOs), director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of some two dozen Blockchain startups and has written over 1500 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat. Irish Tech News put him in the top 10 Token Architects in Europe.

Kastelein has an Ad Honorem - Honorary Ph.D. and is Chair Professor of Blockchain at China's first Blockchain University in Nanchang at the Jiangxi Ahead Institute of Software and Technology. In 2018 he was invited to and attended University of Oxford's Saïd Business School for Business Automation 4.0 programme.  Over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division.

Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London (5x), Manchester, Minsk, Nairobi, Nanchang, Prague, San Mateo, San Francisco, Santa Clara (2x), Shanghai, Singapore (3x), Tel Aviv, Utrecht, Venice, Visakhapatnam, Zwolle and Zurich.

He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He's written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com, and his work and ideas have been translated into Dutch, Greek, Polish, German and French. A journalist by trade, an entrepreneur and adventurer at heart, Kastelein's professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he's travelled for nearly 30 years as a Canadian expatriate living around the world. In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, 'The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he's raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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