The People’s Bank Of China has claimed that its digital coin currency “can now said to be ready” after half a decade of work. It’s not volatile as Bitcoin or any other cryptocurrency. According to Deputy Mu Changchun, it has adopted blockchain architecture that is complex in nature.
He added that the digital coin will adopt a two-tier split system. The digital currency can’t rely on the blockchain architecture due to the gigantic economy and population. Thus, it will deal with PBoC on the top level and commercial bank on the secondary level.
It also explained that the use of the single-tier system will affect the ability of the commercial bank to lend and increase its dependence on the foreign market.
Another executive of the bank said that the digital currency is designed for “small-scale retail high-frequency business scenarios.” This will aid the vast territory and large population effectively. The move by China may help them to independent itself from foreign tech.
As of now, Libra, the digital coin project by Facebook is under scrutiny by the lawmakers. While the launch of China’s digital coin will be a straight competition for the U.S. Former PBoc chairman Zhou Xiaochuan said that the launch of Libra would threaten existing cross border payments and weaken the position of national currencies.
China’s tech giant Huawei chairman Mr. Zhengefei said “China can just issue our own version of Libra. Why should we wait for others to do it? The power of a country is always stronger than that of an Internet company.”
The news reported by the Wall Street said that China is banning bitcoin trading channels but no official news is issued by the government. While it has said cryptocurrency brings in “disorder” and it will dwindle the economic stability.
Now, its future endeavors for the digital currency has changed and promises that the launch will help to accelerate the economic growth in the long-run.