People’s Bank Of China Plans to Launch Its Own Digital Currency
China exploring digital currencies. Wants to reduce costs of production of money and achieve greater control over transactions
The Chinese national bank, People’s Bank of China (PBOC) issued a statement on its official website on Wednesday, 20th January 2016 stating its intent to launch its own digital currency.
PBOC held a meeting to discuss the possibility of creating its own digital currency. The meeting was attended by important dignitaries including the governor of PBOC, Zhou Xiaochuan, deputy governor, Fan Yifei, and currency experts from Deloitte and Citibank among other currency experts.
The official statement issued by the PBOC read that the meeting held to explore the possibility of issuing digital currency has a positive, practical, and far-reaching historical significance.
It can reduce the traditional distribution of notes, which will bring down the high cost of circulation, improve convenience and transparency of economic transactions and reduce money laundering, tax evasion, and other criminal acts.
The statement further suggests that digital currency will give a greater control to the bank over the circulation of money, which can lead to better economic and social development.
Digital currency will help China improve its payment system, improve payment and settlement efficiency, promote economic quality and efficiency upgrades.
The statement also talked about the intention of People’s Bank of China to advance research work in digital currency with relevant international agencies, and to establish a communication link between the domestic and foreign financial institutions to participate in discussions to bring attention to research in digital currency.
PBOC had set up a special research team in 2014 to look into digital currencies and research the legal, monetary, and technological framework, and study the impact of digital currency on the economy and financial systems.
The PBOC in its statement issued on Wednesday stated that while the team has achieved initial results, it should set up a clearer strategic target for launching digital currencies, overcome the key technological barriers ... and aim for an early launch of the central bank's digital currency.
While the statement did not discuss Bitcoin or other cryptocurrencies, it is speculated that many government authorities have problems with it being unregulated, and are concerned that it can be actively used for money laundering and financing extremist terrorist groups.