The People’s Bank of China (PBOC) has been working on a digital currency for the past five years and it seems it’s around the corner.
The currency won’t rely entirely on the blockchain that forms the backbone of cryptocurrencies since it failed to deliver the throughput needed for retail (something we know has affected a number of crypto’s and resulted in the failure of these cryptos to become part of our daily routines).
Mu Changchun, deputy director of the PBOC’s payments department disclosed that in order to minimise the impact on China’s monetary policy, the digital currency will replace cash in circulation rather than generate credit.
Consumers and businesses are expected to download a mobile wallet and swap their cash for digital money if patents registered as early as 2016 are any representation of what the currency will be in its final form.
As with most things, the Chinese government is eager to roll out a solution they can control so crypto’s like Libra aren’t as attractive. With their own digital currency, PBOC can track every transaction and where money is coming from and going – something a government would want to know.