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PBOC’s Digital Currency Plan Might Have a Test Run in Promissory Notes first

“The initial plan of digital currency from People’s Bank of China have been revised by 2 rounds with hope to have a test-run in some closed scenarios like promissory notes. But we haven’t had a timetable for the plan”, said Yao Qian, Deputy Director of Technology Section of PBOC and head of Digital Currency Preparatory Group of PBOC.

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As blockchain technology is increasingly in the limelight, fiat digital currency has been the key area where central banks of counties including UK and Canada are exerting strength. These countries have all put forward their solutions.

At the beginning of this year, PBOC held a seminar on digital currency where Zhou Xiaochuan, the governor of PBOC, also participated. The seminar further confirmed PBOC’s strategic goal of “issuing” digital currency. Since then, the way of China to implement its fiat digital currency plan have become the concern of technological and financial community.

 

“We discuss and simulate the problems we might encounter in the circulation of digital currency every day and overtime work is quite normal. The Preparatory Group consists of experts in technology and finance field”, Yao said when interviewed, looking tired.

Up to now, there is no absolute definition or standard for digital currency. Yao believes that the digital currency of PBOC refers to the digitalization of RMB. It’s an encrypted and digitized fiat money instead of simply a payment tool.

 

 

According to PBOC, its fiat digital currency system will include an  issuing section, a commercial bank section, an identification center, a register center and a big data analysis center. People will use digital currency by a safety-based app. These research results are all in the process of patent application.

 

“Up to now, the stereotype of fiat digital currency is still underway. But there is no specific timetable for its inception.” Yao said

Yao notes the digital currency plan should be implemented steadily with repeated tests. As China has a large population, it will take it about a decade to replace a version of its banknotes with new ones while small countries will only spend several months . Therefore, the test-run of digital currency in some closed scenarios like promissory notes will help China accumulate experience to improve the currency and then promote it to the whole country.  Besides, the issuance of digital currency will also involve the simultaneous updates of Law of the People’s Bank of China, Real Right law, anti-Money Laundry law.

 

This article is translated and reedited from the

COMMENTS(2)

  • 12 months ago Hitchslappy

    The Citibank Digital Currency Reports main Bitcoin concerns/beliefs: 1) Off ramp costs for transferring to fiat which makes Bitcoin less cheap (not looking at the big picture when people may not need to convert). 2) A belief that the new technology won’t be accepted ( A belief that people are tech averse and rely on trusted and familiar systems) 3) A belief that the incumbents will speed up processes to disallow Bitcoin disruption. (That banks who are so accustomed to their control have the financial advantage and incumbent market to speed up to satisfy current customers) 4) Citibank seems to hope for negative regulatory outcomes for the new innovative technology to stifle innovation, citing NY’s BitLicense, thus closing down competition 5) Citibank notes how banks often do not want to service Bitcoin service providers. ( why would they help the competition?). Shammari Khan, Editor, Virtual Currency Space.

  • 12 months ago Hitchslappy

    1) Bitcoin-to-fiat transfer is not costlier than fiat-to-fiat since the whole transaction is just about Bitcoin exchanging hands in its own Bitcoin system and fiat exchanging hands in its own fiat system. In fact, once Bitcoin becomes widely accepted as the only accepted currency, then we won’t even need any conversion to fiat.
    2) It does not matter if certain people are tech averse. If they cannot catch up, then they are the ones to lose. These people are not a liability to the system.
    3) Don’t worry. The Bitcoin system will be upgraded so fast and so dramatic that whatever the improvement the banks are currently researching/implementing will still be considered at snail pace, outdated, and primitive.
    4) That is not a valid argument to reject the technology.
    5) The Bitcoin service providers do not even need the banks’ service in facilitating Bitcoin transactions

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