China seems set to launch its first-ever digital currency. The Deputy Director of the People’s Bank of China’s payment and Settlement Division, Mu Changchun has announced that “a digital currency can be said to be ready.” He made this announcement at a financial forum recently.
In his speech, he explained that the PBoC has been researching the possibility of a digital currency for the last 5 years, and now, it has come up with an acceptable prototype. However, the digital currency would not be “using a pure blockchain architecture” but instead will adopt a two-tier operating system.
At the top of this system will be the PBoC making the digital currency available to commercial banks who would, in turn, make it available to the public. It adopted this system in other to improve “accessibility” and increase the “public willingness” to use, as well as to spread out risks.
This announcement is coming in the wake of Facebook’s warning that Libra may not launch as anticipated in 2020. Ever since it has announced the launch of its own cryptocurrency, the company has faced opposition from lawmakers and regulators in the U.S. and beyond.
However, Changchun did not give a definite date for the launch and adoption of China’s digital currency. Like Facebook, it may take longer than anticipated.