Digital yuan will be different from Bitcoin, Chinese official reveals
A representative from the Chinese central bank claims that digital yuan will have no room for speculation
Mu Changchun, deputy director of the People’s Bank of China (PBoC), revealed that the digital yuan developed by the central bank will be different from Bitcoin and existing stablecoins.
According to Changchun, who is leading the digital currency research institute at the PBoC, the digital yuan will not require the support of a basket of currencies. Moreover, the PBoC official believes there will be no room for speculation with the value of the new digital currency, South China Morning Post reports.
Earlier this year, Changchun took part in the China Finance 40 forum. He said that the digital yuan will be controlled by the central bank, while the Chinese commercial banks will form the second tier of regulation. In fact, the digital analogue of the national fiat will be fully controlled within China.
Despite the aggressive stance towards cryptocurrencies, China is actively working on the digital form of yuan. In October, vice-chairman of the China Centre for International Economic Exchanges Huang Qifan claimed the country was determined to be the first country in the world to launch sovereign digital currency.
Meanwhile, Hong Kong is separately exploring the idea of a digital currency backed by the central bank (CBDC) together with local financial institutions since 2017, and is collaborating with the PBoC for several other projects.
As for other cryptocurrencies that are subject to strict regulations in China, the country's president Xi Jinping recently criticised cryptocurrencies as unregistered securities, financial fraud, and illegal Ponzi schemes.
FURTHER READING: Hong Kong and Thailand to present joint crypto research in 2020
FURTHER READING: China vows to launch the world’s first national digital currency