For years now, it has been known that China has been working on a digital currency project. The thing is, the Chinese government has largely kept its lips sealed on the matter, divulging few details about the planned national digital asset.
Though, as the project’s launch has neared after years of development, Chinese officials have started to convey concrete details about the digital currency, purportedly called “Digital Currency Electronic Payment” or “DC/EP.”
Chinese Official Tells All About Digital Currency
According to the South China Morning Post, which cited a report from a Shanghainese news outlet, Mu Changchun, head of the People’s Bank of China’s digital currency research institute, recently said revealed a slew of information about the DC/EP project.
At an event Saturday, Mu was cited as saying that the digital currency will simply be “a digital form of the yuan,” meaning that there will be no open market for speculation and that the asset will not need to be backed by a basket of currencies like, say, the planned Libra project by Facebook:
“The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies,” Mu said.
He also asserted that a majority of the top-level development of the project has been completed. This statement comes shortly after he asserted that there is no official timeline for the roll out of the project.
DC/EP Pilots On Their Way
Mu’s comments come hot on the heels of reports that the People’s Bank of China is poised to begin the testing of DC/EP in certain regions.
For those who missed the memo, Chinese financial news outlet Caijing reported earlier this month that the nation’s central bank will soon test DC/EP in the cities of Shenzhen and Suzhou, the former of which being China’s iteration of Silicon Valley.
There will be a first phase, which will is slated to begin in the coming weeks, and a second, during which the digital currency will be widely promoted in the two aforementioned cities sometime in 2020.
Caijing noted that per their information, the PBOC has partnered with seven state-owned enterprises to roll out this pilot, these being four Chinese commercial banks and three telecom giants.
The outlet’s source, who is purportedly working close to the pilot program, said that the PBOC has been rather vague with instructions given to commercial banks, urging these financial institutions to implement their own strategies to help push the adoption and benefits of the DC/EP.
While the implementation may be vague, Caijing noted that the pilot will be focused on implementing the digital currency into industries like transportation, education, and commerce.
All In On Blockchain
This confirms that China is all in on the blockchain craze, with its leader, President Xi Jinping, announced in a meeting with the nation’s top officials in October, that he is seeking to implement blockchain as a core technology of the republic.
This is consistent with reports that some of China’s largest corporations are embracing ledger technology. Per previous reports from Blockonomi, for instance, the Bank of China recently completed the issuance of a 20 billion yuan (just around $2.8 billion U.S. dollars) worth of small enterprise and micro-enterprise bonds via blockchain.
Also, ByteDance, the Chinese technology company behind controversial social media app TikTok, is venturing into blockchain alongside an entity affiliated with the Chinese government.
The National Enterprise Credit Information Publicity System, an official business registration website, suggests that ByteDance owns 49% of the new firm through a 10 million yuan investment.
The rest of the new venture is owned by Shanghai Dongfang Newspaper, a state-owned Chinese media company that publishes a popular digital news outlet in China.