China’s Proposed Digital Currency Will Help Banks Bridge Gap on Mobile Payment, Curb Dominance of Alipay, Wechat
By Georgina Lee
The People’s Bank of China’s “imminent” move to launch the country’s own sovereign digital currency underlines the central bank’s urgency to tighten its grip on the nation’s deposit pool and help banks catch up with their mobile payment business, analysts said.
The PBOC set up the project in 2014 to look into launching its own digital currency to cut the costs circulating cash and boost policymakers’ control of money supply. Although the project has been closely guarded, various media reports suggest that the central bank’s researchers have been working intensively on the cryptocurrency’s systems for the past year.
Mu Changchun, deputy director of the PBOC’s payment and settlement department, gave more details about the nearly ready digital currency last week at an industry conference in Heilongjiang, saying the PBOC would rely on Chinese commercial banks to be the conversion agency, helping to convert cash in circulation into the PBOC-backed digital currency, and vice versa.
Photo courtesy of Gautheir Delacroix.