- China May Issue Digital Currency in the Next 2-3 Months
Beijing has developed a framework called the Digital Currency Electronic Payment (DCEP) which would allow its central bank to issue a digital currency to commercial banks and third-party payment networks by Alipay and WeChat Pay.
That’s according to Jack Lee, managing partner of HCM Capital, who told CNBC: “So, they already have all the system and the network ready. I think you will see it very soon, in the next maybe two to three months.”
He noted that the launch could start as a trial and is not meant to replace physical money completely. HCM Capital has invested in a number of blockchain start-ups. It is backed by Foxconn Technology Group, one of the top 10 technology companies.
According to Daniela Stoffel, Switzerland’s state secretary for international finance, the expected launch of China’s digital currency could push authorities around the world to decide on how they want to use and regulate such technology.
She told CNBC: “If the governments now realize that this is now really actually happening, and the question and challenges that are implied in an e-currency are now real, I hope this will lend further momentum to decisions on a global basis.”
Chinese President Xi Jinping has recently called for greater levels of research and investment in blockchain. China must make a “greater effort” to develop and apply blockchain technologies and gain an “edge over other major countries,” he said.
The People’s Bank of China could become the world’s first central bank to introduce its own digital currency. It has applied for 74 patents involving digital currencies to the National Intellectual Property Administration. The soon to-be-unveiled digital currency will be backed by the reserves of valuable assets that commercial institutions deposit in the central bank. Many say the proposed currency could encourage global use of China’s yuan. How will this revolutionize the monetary landscape in China and abroad?