It seems that after Libra, China’s CBDC named DC/EP (Digital Currency Electronic Payment) of China is causing the world to expect. And the main reason is probably that the community is waiting to see what Bitcoin‘s position will be once the currency officially comes to life. However, Chinese central bank officials argue that the DC/EP has nothing to do with cryptocurrency. And they will not be open to speculation like other cryptocurrencies.
China’s CBDC DC/EP is a digital form of the Yuan, no speculation like cryptocurrency
Mu Changchun, head of the People’s Bank of China’s digital currency research institute, said:
“DC/EP is defined as a digital form of the Yuan, there will be no speculation about its value, and it will not need the support of a currency basket. It is different from Bitcoin or stablecoins – cryptocurrencies that can be used to speculate or require the support of a basket of currencies.”
Mu Changchun, head of the central bank’s Digital Currency Research Institute | Image via Wei Shumin/Caixin
Although Libra has long been considered a motive for China to issue national CBDC, however, Changchun did not mention Facebook’s global stablecoin project. Libra is expected to be launched in 2020 and will be supported by a basket of fundamental assets.
Besides, Changchun adds:
“The process of designing, constructing, functional researching, and testing Digital Currency Electronic Payment (DC/EP) has been completed. The next step is to launch pilot programs before launching the digital currency.”
No speculating, no fun
Before Changchun’s announcement, it seems that Chinese citizens were not very impressed with DC/EP.
On Weibo, the feedbacks are similar. Therefore, almost everyone behaves like this: If you don’t allow me to speculate on the digital form of the Yuan, full speculate on other things, like foreign exchange.
While the central bank recognizes the need for a digital version of the Yuan in the internet age, it also sees any digital currency or payment service out of control is a potential threat to the country’s financial security. According to the Chinese government, trading Bitcoin, cryptocurrency, and Libra on Facebook are seen as a challenge to control its capital account.
No Chinese bank or company has officially confirmed it is participating in Beijing’s digital currency plan, and the central bank has yet to disclose those details. But earlier this month, four major state banks and three state-owned telecommunications companies were involved in the process.
Whether Chinese traders and individuals hold new digital currencies is an open question. Electronic payment services are widely available nationwide through companies like Alipay and WeChat Pay.
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