China test­ing its own dig­i­tal cur­rency

Banking Frontiers - - Regulator -

Peo­ple’s Bank of China is said to be test­ing its own na­tional dig­i­tal cur­rency. The cen­tral bank has taken up dummy trans­ac­tions in­volv­ing some com­mer­cial banks in the coun­try. It is said to be in no hurry to have a dig­i­tal cur­rency and may con­sider is­su­ing such a cur­rency along­side the coun­try’s of­fi­cial yuan. The reg­u­la­tor feels that the is­suance of a na­tional dig­i­tal cur­rency would have ‘prac­ti­cal and far-reach­ing his­tor­i­cal sig­nif­i­cance, es­pe­cially the abil­ity to lower the cost of fi­nan­cial trans­ac­tions, in­creas­ing the reach of fi­nan­cial ser­vices to mil­lions of un­banked peo­ple in China. Fur­ther­more, it could im­prove the cen­tral bank’s con­trol over money in cir­cu­la­tion and dig­i­tal trans­ac­tions be­ing made, which could also help re­duce cor­rup­tion. The cen­tral bank is fol­low­ing other reg­u­la­tors like the Bank of Eng­land, the Bank of Canada, and Deutsche Bun­des­bank, which are among those who have been study­ing dig­i­tal fiat cur­ren­cies for a while, even though China seems to be ahead of the rest of the world. Mean­while the cen­tral bank has re­leased de­tails of its pro­posed crypto cur­rency lab - the PBOC Dig­i­tal Cur­rency In­sti­tute, which will be in Bei­jing’s fi­nan­cial district. T

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