Insiders Deny Claims of China’s Central Bank Launching a Cryptocurrency

Insiders Deny Claims of China’s Central Bank Launching a Cryptocurrency

The People's Bank of China, China's central bank, is planning to launch its own cryptocurrency, labeled as DC/EP (Digital Currency/Electronic Payments), by November 11, the day when the country celebrates Singles Day, China's busiest shopping day, writes Forbes, referring to its sources.

China is considering new rules for the country's small-to-medium financial institutions to reduce risk in the wider economy, following a number of state bailouts of smaller lenders, the state-run Economic Information Daily reported on Thursday. Tencent News later said the Forbes' report was speculatively citing a source close to the central bank.

Binance analysts say the digital currency will be backed one-to-one by fiat reserves, and have a two-tier operating structure.

These include the Industrial and Commercial Bank of China, the Bank of China and tech juggernauts Alibaba and Tencent. Last but not least, Union Pay, which is a union of Chinese banks, will also be issued the new cryptocurrency by the People's Bank of China.

Other sources have confirmed that the technology that has been used to create the cryptocurrency named DP/EP has been ready for use since November a year ago.

Anonymous source first confirmed that these seven institutions were the first buyers of China's central bank-backed cryptocurrency. He declined to reveal the name of the said institution. However, according to the source, this implementation will require time.

The designation of China as a currency manipulator was seen as largely symbolic since the potential penalties are less punitive than steps Trump has already taken against China.

China's DC/EP crypto is very much different from Facebook's Libra and Carney's "synthetic hegemonic currency" (SHC.) Both of them have their own set of issues such as Libra is being securitized over the need of world's financial regulation grounds, whereas, Carney's "synthetic hegemonic currency" (SHC) is still to manifest. Facebook also revealed it would rely on a few major companies such as Mastercard, Vodafone and Uber to distribute Libra.

What sets China's cryptocurrency apart from other potential competitors in the space is the fact that while Facebook's Libra is still battling against the U.S. lawmakers for an overarching approval and Bank of England Governor, Mark Carney, is merely advocating the idea of a digital currency overshadowing the United States dollar dominance, China is ready to launch. "This dual delivery system is suitable for our national conditions", said Mu. It cannot only use existing resources to mobilize the enthusiasm of commercial banks but also smoothly improve the acceptance of the digital currency.

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