Chinese Authority Pushes Back on Central Bank Digital Currency Report

This article was originally published by 8btc and written by Lylian Teng.

As China’s central bank gets ready to launch its own cryptocurrency, Forbes reported on August 27, 2019, that the People’s Bank of China (PBoC) would launch a state-backed digital currency and issue it to seven institutions in the coming months. In an immediate response, sources close to the central bank said that the report was simply an inaccurate speculation.

According to the Forbes report, China’s central bank will give its first round of an upcoming central bank digital currency (CBDC) to seven institutions as early as November 11, 2019. Citing Forbes’ source Paul Schulte, who previously worked as global head of financial strategy for China Construction Bank, the report claimed that the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China, China Construction Bank, Alibaba, Tencent and Union Pay will all receive the digital currency.

In the report, an anonymous source, who’s involved in the development of CBDC, confirmed that the seven institutions noted by Schulte would receive the new asset when it launches, also disclosing that an eighth institution could also be among the first tier of recipients. The source added that the technology has been ready since last year and CBDC could roll out as soon as November 2019.

These institutions will reportedly be responsible for “dispersing the cryptocurrency to 1.3 billion Chinese citizens and others doing business in the Renminbi,” according to Forbes. Additionally, the source disclosed that the central bank “hopes the currency will eventually be made available to spenders in the United States and elsewhere through relationships with correspondent banks in the West.”

However, a few hours after the news broke out, a source “close to the central bank” told Sina Finance (one of China’s largest financial news providers) that the statement in the report was an inaccurate guess.

According to a previous report by 8btc, China’s state digital currency features a two-layer operation mechanism that entitles commercial banks or other institutions to disperse the CBDC and it is ready to roll out, which the Forbes report echoed. But the immediate response from an unknown source in a Chinese outlet leaves it unclear how soon the long-awaited central bank cryptocurrency will launch.

The country has been stepping up its efforts in developing its central bank digital currency lately, but few signs of progress have been revealed to the public. However, the release of Facebook’s Libra white paper has motivated the CBDC designers to involve nongovernmental entities in its development and made CBDC a little more visible.

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