Close Sources Reveal China’s Digital Yuan Release Is Short of Time

The PBoC has completed the technological step of creating its digital currency, but that was not the difficult part. Nonetheless, the release date remains unclear; then the central bank has to step up with specific laws for distribution, and this can take longer.

In the news recently, an unnamed source close to the issue said that digital currency is seen as the most viable way for the PBoC to convert zero and negative interest rate policies into commercial banks — a move forced by the increasing coronavirus pandemic.

As per the report, from 21 January to 17 March, Alipay, Chinese tech titan Alibaba’s financial wing, already has filed for at least five patents— all related to the digital currency of the PBoC in certain aspects.

“The first step in technological progress has effectively been achieved, based on the patents,” the source said.

He stated that somehow the patents include various sectors of the digital currency, namely issuance, transaction reporting, digital wallets, anonymous trading guidance and support in tracking and engaging with unauthorized transactions.

However, the source indicated that regulation on digital currency and the creation of a banking and insurance system and regulatory oversight could prove to be a lengthy process— unlike the creation process. The precise or even estimated start date is still uncertain because of this.

Digital Yuan Collaboration
Several private firms such as Alibaba, Tencent, Huawei, and China Merchants Bank collaborated in the creation of China’s digital currency according to the document.

Cao Yan, deputy director of Blockchain’s Advanced Research Institute under Tsinghua University’s Yangtze Delta Region Institute, informed the source that it was a reasonable choice for China’s central bank to profoundly pick private companies.

As previously stated, the interest rates are presently being slashed by banks and institutions around the world, slashing rates to zero or indeed delving into negative territory well into the midst of an unforeseen global epidemic. Accordingly, Cao suggests that the PBoC will intensify its endeavors in the digital currency, or suffer falling backward.

“When there is a risk that China will contemplate reducing its interest rate into negative territory as a potential option and applying such regulation to commercial loans and lending, this will be accomplished by a distributed digital currency rather than M0,” Cao said in the news.

As though the coronavirus had not already disrupted most of China’s digital currency.