China central bank, People Bank of China (PBOC), is nearly ready to issue its own sovereign digital currency. Its deputy directors of the payment department said that the institutions’ virtual currency is almost ready, according to Reuters. The move is in line with earlier public statements made by China earlier. China officials say that they plan to release China’s Central Bank digital currency by August 2019.
Digital Currency Project
Researchers at the bank have been working on the currency for five years. It has formed a research team in 2014. By this project, aim to cut the circulating traditional paper money. Besides, they want to boost policymakers’ control of the money supply.
However, the PBOC hasn’t been alone in exploring the possibility of issuing digital currency as an alternative to cash. Yet, China is not the only one looking into this idea. Based on a report, there are at least 40 central banks across the world looking for the same opportunity. One of them is Sweden’s Riksbank.
According to the same report, China’s central bank would launch its digital token through a two-tier system. In other words, both the PBOC and commercial banks are legitimate issuers. The PBOC said it wouldn’t rely on blockchain exclusively since the transaction volumes in China is too massive. Thus, they would instead maintain a more neutral stance on which technology it decides to use.
Blockchain is also known as distributed ledger technology It is the framework that underpins cryptocurrencies like bitcoin.
The news comes as global central bankers take a skeptical view on Facebook’s plans to create a cryptocurrency. Facebook plans to create it alongside a consortium of major companies. The companies include Visa and Uber. Facebook cryptocurrency is called Libra, the currency hasn’t gone unnoticed by the PBOC. They also mention that it should come under central bank oversight.