China is closer to launching its own central bank digital currency (CBDC) than it may have let on. According to reports coming out of the country, a new digital currency electronic payment (DCEP) is close to being introduced. The executive VP of the China International Economic Exchange Centre, Huang Qifan, has also confirmed the initiative by the People’s Bank of China (PBoC).
Qifan asserts that the country has been working on the program for around five to six years. The endeavor will make China the first country to have introduced an official digital currency and the executive adds, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc., providing useful reference for the provision of money and the implementation of monetary policies.”
… #PBOC has been studying #DCEP for five or six years, and is likely to be the first central bank in the world to launch a digital currency," said Huang Qifan, Vice President of #China Center for International Economic Exchanges, in #BundSummit #stablecoin #digitalcurrency pic.twitter.com/2M2lKKAWoA
— China Finance 40 Forum (CF40) (@ChinaFinance40) October 28, 2019
Now that China’s President, Xi Jinping, has gotten behind the push for blockchain and digital currency innovation, it appears that the DCEP will be here sooner, rather than later. The leader spoke last week about the need for companies and entities across the country to embrace the technology and that has sparked massive interest in development.
That interest is confirmed by an increase in trading in blockchain company stocks, as well as in Internet searches in the country related to crypto terms. According to the Global Times, a media outlet that covers activity in the country, stocks in A-share firms in China reached their 10% daily limit after the endorsement. The PBoC has also spoken up on the subject and is urging banks across the country to speed up their use of blockchain technology to transition to a digital finance industry.
Looking at information tied to searches on blockchain in the country, it becomes apparent that interest is at an all-time high. According to Twitter user Cole Kennelly, October 23 saw 777,000 “blockchain” hits on WeChat searches. Just two days later, that number grew to 9.2 million. Searches for “Bitcoin” increased, as well across the three-day period, reaching 1.3 million from 572,000.
WeChat searches (10/23/19):
– 区块链 (Blockchain): 777K
– 比特币 (Bitcoin): 572K
WeChat searches (10/25/19):
– 区块链 (Blockchain): 9.2MM
– 比特币 (Bitcoin): 1.3MM
— Cole Kennelly (σ, σ) (@ColeGotTweets) October 27, 2019
While blockchain continues to grab hold in China, as well as other parts of the world, regulators are quick to caution about the need to introduce more control. This is in line with how Bitcoin was designed, given that it was never meant to work outside of government authority, and China’s chief accountant for the State Administration of Foreign Exchange, Sun Tianqi, reiterated the importance of regulations at a recent finance forum in Shanghai.
According to Reuters, he told the audience, “Financial technology can promote the opening up, innovation and development of a country’s financial market. But it could also bring a lot of illegal cross-border financial activities. This should be a matter of great concern to all countries, especially emerging markets.”
As a result, and to mitigate those concerns, governments need to be more involved in creating regulations for digital currencies. Without such control, the space could continue to be chaotic and wild, threatening established world currencies.
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