The People's Bank of China has completed the technical phase of developing its digital currency, but the most difficult part is yet to come. According to reports from official sources, the People's Bank of China (PBoC) has concluded the first technical step in the development of its currency. state digital.
However, the launch date is still very vague. Now, the central bank's commitment is aimed at drafting relevant laws for its circulation, and this may take even longer.
An anonymous insider told the Global Times that state cryptocurrency is considered to be the most convenient way for the PBoC to translate zero and negative interest rate policy into commercial banks, a measure forced by the growing covid-19 pandemic. .
Now we think of appropriate patents and regulations
According to the source Alipay, the financial arm of the Chinese technology giant Alibaba, has already applied for at least five patents from 21 January to 17 March, all connected in some way to the digital currency of the PBoC. ”Judging by the patents, the first step in technological development has basically been completed, ”said the insider.
He added that patents cover various areas of the digital currency project, including issuing, recording transactions, digital wallets, anonymous commercial support and assistance in supervising and managing illegal accounts.
However, the insider noted that digital currency legislation, the establishment of a banking and insurance framework and regulatory oversight could prove to be a long process, even more than the initial development phase of the cryptocurrency. For this reason, the exact or even approximate date of the launch is not yet clear.
A team of private investors to support the state cryptocurrency
According to the report, several private companies such as Alibaba, Tencent, Huawei and China Merchants Bank have participated in the development of the Chinese digital currency. Cao Yan, deputy director of the Advanced Blockchain Research Institute under Tsinghua University in the Yangtze Delta Region, said it was a logical choice for the Chinese central bank to choose private companies that knew blockchain technology as its partners. for invest.
Banks and institutions around the world are currently lowering interest rates, cutting them to zero or even venturing into negative territory ahead of the prospect of an unprecedented global pandemic.
As such, Cao argues that the PBoC should speed up its efforts to launch digital currency or risk falling behind. "If there is a possibility that China is considering lowering its interest rate in the negative zone as a final option and directing this policy towards private loans and commercial loans, a widespread state digital currency will be able to achieve this goal. "Cao told the Global Times.