While Libra is fighting obstacles, China is on track to launch its own cryptocurrency.
Cryptocurrency and China: closer and even closer. In August, the country said that its own token is just around the corner. The recent reports reiterate this “closeneness.”
To be fair, China’s efforts are remarkable. Why? Because the country has banned and re-banned crypto. As a result, 88 Chinese cryptocurrency-exchanges closed. 85 projects for the initial placement of tokens seized to exist.
At the same time, in March 2019, the People’s Bank of China refused to recognize cryptocurrency as a means of payment, referring to its unreliability. However, it seems like it is a matter of who actually owns the cryptocurrency — the Chinese government or someone else. Thus, in August China’s central bank announced it is going to launch CBDC very soon.
It seems that the continuously worsening trade war between the U.S. and China only encourages this project.
What will be the main features of China’s crypto?
The CBDC coin will have a 2 level structure due to the country’s complicated economy. Mu Changchun, Deputy Chief of the People’s Bank of China (PBOC) explained, “The People’s Bank of China is the upper level and the commercial banks are the second level. This dual delivery system is suitable for our national conditions. It can use existing resources to mobilize the enthusiasm of commercial banks and smoothly improve the acceptance of the digital currency.”
He also mentioned that CBDC’s design will to some extent replicate Libra. And it will handle 30.000 transactions per second.
CBDC will be supported by Alipay and accessible through WeChat. Curiously, Alipay officially advised a few days ago they will ban any crypto payments.
The soon-to-be launch has generated a lot of opinions. In particular, Ripple’s CEO, Brad Carlinghouse believes it should be “a call for action for the US” if they want to remain a leader in the cryptocurrency industry.
