While the U.S. is exploring the feasibility of a central bank digital currency (CBDC), China is rushing to launch its currency. Correctly, the People’s Bank of China (PBOC) has filed 84 patents related to digital payments.
China’s central bank digital currency is coming soon
It seems that the Chinese central bank is severe with the launch of its CBDC. They filed 84 patents related to the launch of the DC/EP digital payment system. The PBOC number of patents related to the CBDC was revealed following an investigative study by the U.S. Digital Chamber of Commerce. According to the report, the patents are related to the bank’s launch of the DC/EP payment system.
These patents focus on the design of protocols that will control the creation and delivery of digital yuan. Moreover, the patents will address frameworks for interoperability with other banks and the integration of DC/EP in China’s current banking network.
The patents also refer to the “tokenomics” proposal proposed by the DC/EP development team. Some patents include details related to programmed inflation control mechanisms. Other patent filings geared towards creating a middle-class entity will allow customers to deposit fiat and withdraw the digitized renminbi. The same patent refers to the creation of digital wallets or chip cards for CBDC retail owners.
Commenting on the size of China’s digital currency plan, Perianne Boring, President of the Digital Chamber of Commerce, said:
“The topic is that China has invested heavily and is taking this very seriously. That’s a big difference from the U.S. approach, and this only highlights that.”
Beijing’s work on its proposed digital currency is going smoothly, but without any launch date announced by the authorities.
While many countries are exploring the capabilities and feasibility of a central bank’s digital currency, China has invested vast amounts of resources in developing it. As things are going on, China seems to be the most likely nation to win the central bank’s digital currency race.
U.S. rushed in the race to release CBDC
New moves in China’s CBDC release are causing a wave of interest across Europe and the United States. Beijing’s work on a sovereign digital currency that can be adopted by smaller states has increased pressure on central banks in major economies to consider launching their digital currency.
On February 11, 2020, in front of Congress, Jerome Powell, chairman of the U.S. Federal Reserve, revealed developments such as Facebook’s Libra and China’s CBDC plans that put CBDC at the forefront.
Highlight: “We are following the whole question of digital currencies,” says Fed Chair Jerome Powell. “It’s not something that we are actively considering. For us, it raises significant issues that we would want to see resolved.”https://t.co/xpAujlCWBd pic.twitter.com/n5M5XDU5AZ
— Yahoo Finance (@YahooFinance) September 6, 2019
Powell admits Libra “really lit the fire” under the bank’s job.
He said:
“It’s a bit of an alarm call that this is coming fast, and can go in quite away, you know, widespread and systematic pretty quickly if you use one of the networks. technology as big as Libra did.”
Powell was asked about the competing pressures caused by China’s efforts to create the digital yuan and how the Fed is aware of the work of the Chinese central bank. In response to that question, he remarked remarkably that an utterly public ledger would not be suitable for such a system in the United States is built.
But Powell emphasized that the Fed has not officially embarked on the creation or launch of a digital dollar.
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