Jack Lee, the founding managing partner of HCM Capital, has said that China’s Central Bank Digital Currency is available and is expected to be released in 2-3 months.
In an interview with CNBC that aired on the 11th of November, Jack indicated that the People’s Bank of China will utilize the proposed asset in strengthening its oversight over cash flows.
Is the Chinese CBDC Available?
Jack said that the PBoC already monitors the movement of money through serial numbers on banknotes and that blockchain would make this process even more efficient. He also pointed out that China developed a Digital Currency Electronic payment system, which is a hybrid of the CBDC and uses the pre-existing payment and banking structure.
Jack said that the PBoC’s currency is available and will be released in 2 or 3 months. However, in a previous announcement by the PBoC, they said that the currency has no set a release date.
Governments Under Tension to Develop CBDCs
In another interview with CNBC on the 11thof November, Daniela Stoffel, the State Secretary for International Finance of Switzerland, said that China’s CBDC was not unexpected. When asked if the development from China was putting pressure on countries to do something similar, Daniela said that the pressure has always been there, explaining that nations are now realizing that developing a native digital currency is the next big agenda for global advancements.
Daniela went on to say that blockchain has its shortcomings and that money laundering problem has to be dealt with. She also proclaimed that authorities should foster the spirit of collaborating with startups more and guide them through uncertainties.
Some weeks ago, the Standing Committee of the NPCC has legislated a rule guiding cryptography which will become effective from the 1st of January and might create an entry for its CBDC.
The Hong Kong Monetary Authority just disclosed that it is carrying out studies on developing a CBDC. This announcement came on the 7th of November in a news report.
Partnership with the PBoC
HKMA also disclosed that it is partnering with the digital currency department of the People’s Bank of China. The PBoC is expected by many to pioneer the drop of the world’s first CBDC.
The operation is being carried out in conjunction with Hong Kong Interbank Clearing Ltd. and 3 other financial establishments, and blockchain consortium R3.
In the report, the senior executive director, Edmund Lau broke down the operation. He stated that the operation involves a proof-of-concept analysis on coin-based CBDC, studies on debt securities allocation through the utilization of blockchain, an examination on the probability of CBDC’s payment policies and investigation into a probable two-tier allocation prototype, which could create the possibility for corporate representatives to own and utilize CBDC coins as endorsed parties of their establishments.
HKMA is said to be concentrated on using the CBDC solely for financial establishments as opposed to retail activities. They are particularly interested in local interbank payments and wholesale payments. Edmund said that there is already a lot of access to digital mobile payments products.
HKMA has also approved a memo of agreement with the bank of Thailand to carry out a collective study program into the use of a CBDC for border-to-border payments and interbank payment-versus-payment services between the nations in May.
What to Expect
Joe Lubin, CEO of ConsenSys has commented that he doesn’t believe that the PBoC will execute the decentralized facets of blockchain in its coming CBDC. He went on to say that the security will probably be used to sustain administrations’ management of cash flow and that the PBoC will utilize some of the old methods of blockchain.
Regardless, the Deputy Director of the PBoC, Mu Changchun said in August that the CBDC is going to be constructed to be a centralized, two-level operation, seeing the PBoC at the cap level and the succeeding level will be handled by local banks.