According to a senior official, The People’s Bank of China (PBoC) is real soon going to issue its own cryptocurrency.

Mu Changchun, deputy director of the PBoC’s payments department, said that the bank’s researchers have been working intensively since last year to develop systems and the cryptocurrency is shortly going to be out. He said this at an event held by China Finance 40 Forum over the weekend in Yichun, Heilongjiang but did not give specifics on the timing.

Mu reproduced the PBoC’s aim that the digital currency would replace Mo or cash in circulation, rather than M2, which would generate credit and impact monetary policy. He said that the digital currency or cryptocurrency would also encourage the Chinese fiat currency, Yuan’s circulation and internationalization. 

The statements indicate that the PBoC is moving towards formally introducing a digital or cryptocurrency of its own after five years of research. Libra, Facebook Inc.’s pressure to produce cryptocurrency has caused concerns among global central banks, including the PBoC. PBoC said that the digital asset must be put under the sight of the central bank to prevent the risk of possible foreign exchange and protect the authority of monetary policy. 

Sun Tianqi, an official from China’s State Administration of Foreign Exchange, at the forum said that Libra must be seen as a foreign currency and be put under China’s framework of forex management. Unlike the decentralized offerings of the blockchain, the PBoC’s digital currency is planned to give Beijing more control over its financial system.

According to patents registered by the central bank, what consumers and businesses are supposed to do is they would download a mobile wallet and after that exchange their Chinese Yuan for the digital money, which they could use to then use to make and receive payments. Most importantly, the PBoC could also track every time money changes hands.

The PBOC, when announcing a statement listing its work plan for the second half of 2019 released in early August, said that the central bank will promote the research of China’s legal digital tender and watch the trends of virtual currency or digital currency development overseas and at home.

Dave Chapman, executive director at BC Technology Group Ltd, said that it is without a doubt with the announcement of Libra, governments, regulators and central banks around the world have had to advance their plans and approach to digital assets. He then added that they have to consider the possibility that non-government issued currencies could dramatically disturb finance and payments.

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