China Daily, an English-language news outlet owned by the Communist Party of China, announced that China’s Central Bank is ready to launch its government-backed cryptocurrency.
This was revealed in a report published on China Daily on August 20th. According to the report, Mu Changchun, the deputy director of China’s Central Bank’s payments unit, announced this on a forum.
The report also states that the decision to launch its own cryptocurrency may have connection with Facebook launching its cryptocurrency Libra.
Yang Dong, a director of the Research Center of Finance Technology and Cyber Security at Renmin University of China, told China Daily:
“Further testing is needed before officially launching the Chinese CBDC, gaining inspiration from the Libra.”
If everything goes according to the plan, China’s Central Bank expects to launch its cryptocurrency sooner than Libra.
China’s love-hate relationship with cryptocurrencies
The Chinese government has been cracking down on cryptocurrencies for years. The government banned Initial Coin Offerings (ICOs) as well as crypto mining.
Moreover, Chinese cryptocurrency laws are pretty strict, and financial institutions can’t use bitcoin for trading. Also, the government ordered crypto exchanges to stop operations within the domestic market.
These are just some of the reasons why the announcement of launching a native Chinese cryptocurrency was surprising.
Seven institutions to receive first Chinese cryptocurrency
According to the Forbes’ source, China’s state-backed cryptocurrency will be distributed to seven institutions in the coming months. Some of these institutions include tech giants such as Alibaba and Tencent. This will help to distribute the cryptocurrency into the country’s economy.
Overall, the opinion is that the cryptocurrency will have a positive impact. Shao Fujun, China UnionPay chairman and former People’s Bank of China official, confirmed this to China Daily:
”The cryptocurrency will have lots of positive impacts, including tracking the money flow in economic activities and supporting making monetary policy.”
Forbes states that the plan is to launch the cryptocurrency on Singles Day on November 11th.