A former senior official of the People’s Bank of China shared with us the fact that the country has already completed work on the digital currency backend.
News on the Chinese CBDC
During Fintech 2020, Wang Wong Zhongmin, former vice-president of the National Council of the Social Security Fund of China, announced that China has already completed the development of the backend architecture of the Chinese digital central bank currency (CBDC).
With so many existing and developing cryptos, China is trying to create a payment infrastructure where these currencies could coexist with the local Chinese digital currency. Wang said that such a system will create an environment in the digital space for healthier competition and cooperation.
According to Zhongmina, the COVID-19 virus epidemic has increased competition in the currency’s digital space, and more technology giants and governments are interested in creating a better digital payment infrastructure. A former official speaks about the cryptocurrencies, particularly emphasizing the importance of Libra’s recent development through Facebook.
China has used advanced forms of mobile payments such as Alipay from Alibaba and WeChat Pay from Tencent, which together have 1.7 billion active accounts in China, which is 300 million more than its population. The fastest-growing country in terms of technology has combined social media, e-commerce and payments to create an innovative highly advanced online commercial infrastructure.
Digital Juan in the testing phase
On the forum, Wang said that the CBDC in China is currently in the testing phase. The country has already started to develop new laws and regulations to help launch and implement the digital currency for good.
Although no one really knows when the digital yuan will come out, Ledger Vault boss Glenn Woo said that the Chinese CBDC will probably see the light of day this year and will be the first state-supported virtual currency in the world.
China’s long term objectives
China’s goal, given the long period of time, is to accelerate its plan to implement the CBDC to turn the current crisis into an opportunity for the country. Cryptocurrencies are probably the best tool to translate the zero and negative interest rate of central banks into commercial banks.
China sees the CBDC as an important strategy that can give the Chinese yuan an edge in international economic development. As we know, the digitisation of the economy has the highest priority in this country, so even without official prime ministers, the yuan can be released overnight.