Mu Changchun, deputy director of the PBOC’s payments department, said at an event held by China Finance 40 Forum over the weekend that the bank’s own cryptocurrency is “close to being out.” According to reports, the bank’s researchers have been researching and developing the necessary systems for a digital currency for around five years.
Mu continued, emphasizing that the new cryptocurrency would replace M0, meaning the cash and coins in circulation, rather than M2 which is credit-based and would affect monetary policies.
Spurred by Facebook’s recent creation of its own cryptocurrency, Libra, central banks are now rushing to implement their own legal digital tender. While decentralized blockchain currencies make the monitoring of money movements more difficult, the aim of the PBOC’s currency will be to provide Beijing with greater control and oversight over the exchange of funds. This move comes as no surprise given the PRC’s advanced adoption of blockchain-based technologies and policies.
Patents registered by the PBOC say that consumers and businesses would download a mobile wallet and swap their yuan for digital money for making and receiving payments. As money changes hands, these payments would then easily be traceable by the central government in Beijing.
The PBOC said in a statement for its second half of 2019 projections that it will “expedite the research of China’s legal digital tender” and track the trends of virtual currency development abroad and domestically. So far, the United States has no such plan for the development of a national centralized cryptocurrency.