According to recent statements by People’s Bank of China (PBOC) official Mu Changchun, the country’s digital yuan is ready for trials. The central bank digital currency (CBDC) will decidedly not be a speculative asset like bitcoin or stablecoins, and will not need a currency basket for backing, Changchun affirmed. Reactions to the announcement are varied, with some Chinese traders disappointed, reportedly saying they will find other means to speculate.
Also Read: China’s Inflation Hits a Record 4.5% as Beijing Prepares to Test Digital Yuan
Not Bitcoin, Not Speculative
Head of the PBOC Digital Currency Research Institute, Changchun stated Saturday at a financial meeting in Beijing that “The digital yuan is used to spend, not for speculation. It does not have the characteristics of bitcoin speculation, nor does it require a basket of assets to support its value like stablecoins,” reported Shanghai Securities News.
The media outlet details that Changchun affirmed the digital yuan would not be a crypto asset like bitcoin or a type of stablecoin as being proposed by Libra.
Preparations ‘Basically Completed’
The report quotes Changchun as saying:
At present, the digital currency DCEP [Digital Currency Electronic Payment project] of the People’s Bank of China has basically completed the top-level design, standard formulation, functional research and development, joint debugging and testing.
The next step is to begin rolling out pilot programs for the currency, though no specific timeframe has been given. When this is complete, the projected plan is to issue the currency to commercial banks which would then disperse the CBDC to the public.
Public Reaction to Changchun’s Statement
Reactions to the news have been varied, according to reports. One user of social media platform Weibo reportedly remarked “If you don’t allow me to speculate on the digital form of the yuan, I’ll speculate on other things, like foreign exchange.” Another on Sina.com is quoted as saying “So there will be no fun in it.”
Reception outside of regional media hasn’t been as dynamic, possibly because few are surprised by the news, given the Chinese government’s established track record of standing in opposition to speculative practices when it comes to crypto.
Despite bullish statements in November from President Xi Jinping, officials have made it clear that the Chinese government’s push is for the development of a regulated blockchain industry and not for ICOs or other such speculative practices. Banks may not deal in decentralized cryptocurrencies such as bitcoin, nor can exchanges directly facilitate trading thereof.
What do you think about Changchun’s statements? Let us know in the comments section below.
Image credits: Shutterstock, Shan_shan, fair use.
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