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China continues to launch its own cryptocurrency

Jan 13, 2020 | News
China continues to launch its own cryptocurrency

The Chinese authorities are continuing the course which were set in early 2019, to actively develop digital yuan and implement it for the domestic market.

At one time, financial sector executives, as well as PBoC head Guo Shutzin, promised that a fully digital yuan would be created by the end of 2019. And not only within the regulatory framework, but also in the form of appropriate payment applications, wallets and exchange offices.

It was a natural reaction to the active release of numerous stablecoins tied directly to the US dollar. However, China is trying to prevent the full dominance of the United States in those sectors of the economy that promises great benefits. In addition, it was a response to large corporations, such as Facebook, which through their own cryptocurrency, seek greater independence.

According to the original plans of the National Bank, the new "digital yuan" planned to be used both for the domestic market and for international trades. The second option promised the greatest prospects as it allowed to achieve full transparency, easy conversion to any other currency and relative control of payments.

However, in the fall, former PBoC manager Zhou Xiaochuan said that the digital yuan is currently intended to be used only for the domestic market and retail. According to him, it is too dangerous to deviate from the fiat currency in the format of international trade.

Anyway, it's too early to speak about the release of a fully digital yuan (RMB) with all its infrastructure. Preliminary launching plans are the end of 2020.

It is not yet known how the complications of the economic situation in the country with the coronavirus epidemic will affect the Chinese authorities' plans. We will monitor the situation.