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China has completed the development of the basic functions of its digital currency


China has gone one step further towards launching its digital currency.

In fact, according to the local English newspaper Global Times, the country's central bank, People's Bank of China (PBoC), has completed the development of the basic functions of the digital currency, in collaboration with several private companies, and is currently developing an appropriate regulatory framework to launch it on the markets.

This is just a rumor, but according to the Global Times, it comes from "Industry experts".

According to these experts, the country will even have to make efforts to accelerate the launch of the digital currency to face current economic and financial emergencies, such as the global reduction of interest rates to zero, or even in negative territory, and the issuance of liquidity in the markets.

In fact, this digital currency would be considered the most convenient tool to implement such monetary policy.

It was also discovered that between January 21 and March 17, 2020, the Chinese financial giant Alipay would have registered five patents in this digital currency, now known as DCEP.

These patents would be related to:

  • token issuance,
  • transaction log,
  • wallets,
  • commercial support,
  • supervisory assistance.

Although Alipay has not confirmed this, Global Times reports that an anonymous informant has confirmed that these patents relate to the basic functions of a digital currency. In any case, according to the same inside information, this would suggest that the first step in the development of DCEP would be "Basically completed".

However, the next step, the regulatory process, could be slower and take longer, particularly with respect to cooperation with bank regulators in AML controls and supervision.

Deputy Director of Tsinghua University Advanced Blockchain Research Institute Cao Yan said he believes the PBoC should accelerate the launch of the digital currency to address the emergency.

"If there is a possibility that China is considering lowering its interest rate in negative territory as a final option and targeting such a policy on loans and commercial loans, a circulating digital currency instead of M0 will be able to do it."

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