China’s central bank says it’s close to releasing its own digital currency

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PBOC official Mu Changchun says the institution’s virtual currency is “almost ready” for release.
It will have a two-tier system where both the PBOC and commercial banks can issue the token.
The news comes as central bankers take a skeptical view on Facebook’s cryptocurrency plans.

China’s central bank is nearly ready to issue its own sovereign digital currency, according to a senior official.

Mu Changchun, deputy director of the People’s Bank of China’s payments department, said the institution’s virtual currency was “almost ready” for release, according to Reuters. Mu’s comments were also reported by Bloomberg.

Researchers at the bank have been working on the currency for five years. The PBOC hasn’t been alone in exploring the possibility of issuing digital currency as an alternative to cash; Sweden’s Riksbank is another central bank looking into the idea.
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According to reports, China’s central bank would launch its digital token through a two-tier system, under which both the PBOC and commercial banks are legitimate issuers. The PBOC said it wouldn’t rely on blockchain exclusively, and would instead maintain a more neutral stance on which technology it decides to use.

Blockchain, otherwise known as distributed ledger technology, is the framework that underpins cryptocurrencies like bitcoin.

“Personally, I’m still struggling to understand the advantage of this over the current system,” Mati Greenspan, senior market analyst at trading platform eToro, said in a note Monday. “Something tells me that this is a completely different animal from what we know as cryptocurrencies.”

The news comes as global central bankers take a skeptical view on Facebook’s plans to create a cryptocurrency alongside a consortium of major companies including Visa and Uber. Called Libra, the currency hasn’t gone unnoticed by the PBOC, which said last month that it should come under central bank oversight.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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