After profound research and testing, the People’s Bank of China (PBOC) is finally ready for the launch of its digital currency. Confirmed by the senior officials of the PBOC, the bank is on its way to launch its cryptocurrency. It is confirmed that the research, development and testing period is successfully concluded and the distribution will start soon in the institutions and banks.
The Vice Governor of PBOC, Fan Yifei has conveyed in a speech that there some experimental areas in DC/EP pilot program that are still being tested to confirm the performance in various scenarios and service scale. Moreover, some improvements are needed in the digital sovereign currency.
Can Customers Issue The Digital Currency Directly?
PBOC has cleared that its digital currency will only be issued to institutions and banks and will not be distributed to the customers directly. People’s Bank of China will be the sole legal body in charge of its issuance and distribution. This means that the local customers can issue the digital RMB from the institutions, the same way the physical currency is distributed now.
How Would Digital RMB Change Affect The Existing System?
This upcoming digital currency system will only affect the cash circulation in the country and have no effect on the supply of money. The money supply system would not be disrupted in any way and also there would be no such effect on the monetary transmission mechanism. The Transaction information about the digital RMB can be tracked and recorded by the central bank. According to the head of the PBOC, Mu Changchun, this digital currency system will prevent any illicit transaction such as money laundering and even terrorist financing.
The research was started in 2014 with the launch of its Digital currency institute in 2016 and a work team for experimenting in 2017. The PBOC had recently announced that they would continue their research towards their sovereign digital currency (CBDC) in 2020. Now that the development is almost rolled out, the promotion and launch are expected to happen soon.