China to launch sovereign cryptocurrency with 5 banks, Alibaba and Tencent

The Chinese national cryptocurrency is almost ready, according to a senior executive of the People’s Bank of China. Its date of commissioning however remains unclear but we know the major institutions that will support its launch.

 

Forbes revealed on August 27 some additional details on the Chinese cryptocurrency. According to the US magazine, quoting Paul Schulte, former director of financial strategy of China Construction Bank, the launch of this cryptocurrency will be supported by seven institutions: the Agricultural Bank of China, Bank of China, Union Pay (its credit card network), Industrial and Commercial Bank of China, China Construction Bank, e-merchant Alibaba and Tencent, owner of WeChat. An eighth player, whose name has not been revealed, could join these partners. According to an anonymous source still quoted by Forbes, the official launch would take place on November 11 on the occasion of the Single Day, day of promotions and record sales in the country. The Chinese , who seems to have taken the lead over other industry players by announcing the launch of a sovereign cryptomonnaie, would become the first country to adopt an official virtual currency.

The Chinese cryptocurrency is ” operational “, in the words of Mu Changchun, deputy director of the payments department of the People’s Bank of China, at an event organized by the China Finance 40 Forum. An announcement that echoes recent comments by Huawei CEO Zhengfei Ren, who told Corriere della Sera that China should issue cryptocurrencies.

ELECTRONIC MONEY WITHOUT DECENTRALIZATION

According to the 80 patents filed – Chinese institutions have been working on a sovereign cryptocurrency project since 2014 – it will be accessible to individuals and businesses in the form of a mobile application. Yuan is transformed into digital assets that make and receive payments, with trade taking place under the auspices of the People’s Bank of China. Eventually, it must replace the circulating species (M0).

Another clarification of the senior executive of the PBoC reported on August 12, 2019 by Reuters : this cryptocurrency will evolve simultaneously on two separate payment networks, that of the Central Bank and that of retail banks, with in part the use of technology Blockchain. But other technologies are being studied to support the bulk of the country’s transactions as a whole.

Unlike other cryptocurrencies, institutional control is total. Government objectives: to control and stabilize the financial system and also support the circulation and internationalization of the yuan, to which the crypto-yuan will be backed. In a context of trade tensions with the United States , China could find here the way to get rid of the dollar.

CRYPTOCURRENCY UNWELCOME BY CHINESE AUTHORITIES

In any case, it has in recent times prepared the ground for the launch of its cryptocurrency by restricting the margin of maneuver of the players in the sector. The ICO (initial offerings corner ) are banned since 2017, and the country plans to ban mining bitcoin is to say validating a transaction bitcoins. China has also closed 124 crypto foreign exchanges.

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