China’s Central Bank Gives Precedence To Creation Of Central Bank Digital Currency

The People’s Bank of China (PBoC), China’s central bank, stated that it is pushing forward with its plant to create a cryptocurrency. While briefing about the initiative through a video conference, the bank stated that the Party Central Committee and the State Council gives importance to economic and financial initiatives including monetary policy and support for small industries.

PboC proposed that it should fast forward the R&D of its crypto currency. Additionally, the statement implies that more focus will be given to other overseas and national cryptocurrencies. The bank also stated that it should bolster financial threat remedies and interpretation of policy propaganda, while responding quickly to social worries.

PBoC is giving utmost priority for the creation of a crypto renminbi as a reply to the increasing adoption of cryptocurrencies across the world, particularly after the launch of Facebook’s Libra venture. Earlier this month, PBoC director Wang Xin stated that Libra could “could create a scenario under which sovereign currencies would coexist with U.S. dollar-centric digital currencies. But there would be in essence one boss, that is the U.S. dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”

PBoC has received clearance from the State Council to start working with other major market participants on the aforementioned central bank digital currency (CBDC).

Notably, PBoC governor Zhou Xiaochuan cautioned that the nation must take adequate precautions against Facebook’s cryptocurrency Libra. Zhou worked as PBoC governor from 2003-2018 when government started cracking down on cryptocurrency related ventures, including a prohibition on ICOs (initial coin offerings).

During a recent Congressional hearing on “Examining Regulatory Frameworks for Digital Currencies and Blockchain,” the US legislators have called for the country to take a lead in blockchain and cryptocurrency related innovation.

Facebook has cautioned its investors that its Libra stablecoin may never become a reality due regulatory hurdles. In the meantime, the world’s largest retailer Walmart has filed a patent for a native cryptocurrency similar to Libra.