China launched “closed testing” of its national cryptocurrency

The People's Bank of China (PBoC) is pushing ahead with its digital currency plans in hopes of surpassing Facebook 's Libra .

A special team from the Central Bank's Digital Currency Research Laboratory is currently developing the system in a closed environment, away from the PBoC headquarters in Beijing, a person familiar with the issue told CryptoBTCmining.com.

According to this person, the team has been working in this separate place since the beginning of summer, so they could completely concentrate on the project.

“The work was accelerated, as in June, Facebook unveiled its vision of Libra, a global cryptocurrency to facilitate payments,” the source added.

The Libra announcement has agitated governments around the world, spurred congressional hearings in the United States, and boldly redefining central banks such as Bank of England Governor Mark Carney.

Much about the PBoC project remains a secret, and there are conflicting opinions about the schedule and degree of participation of large Chinese companies.

When is the launch?

According to a September 4 report owned by China Daily, the central bank’s digital currency (CBDC), “closed testing” began to simulate payment scenarios involving “some commercial and non-governmental institutions.”

If all goes well, the project can be started before the Libra, which plans to make his debut in the first half of 2020, reported China Daily in my previous article.

Last week, Forbes announced that the largest four Chinese state-owned commercial banks, as well as fintech giants Alibaba, Tencent, Union Pay and an unnamed company will be the first group of organizations to receive national digital currency. Chinese CBDC may be launched as early as November, wrote Forbes.

The four giants of commercial banks are the Bank of China, the Construction Bank of China, the Agricultural Bank of China and the Industrial and Commercial Bank of China, which is one of the largest banks in the world in terms of assets. But a few hours after the Forbes report, Tencent News and Sina of China announced that the timing and scale of the eight institutions were “inaccurate speculation,” referring to people close to the central bank.

And yet, a second source who is familiar with the question told CryptoBTCmining.com that the organizations mentioned in the Forbes article did participate in the development of the CBDC initiative. But the source would not say whether all or only some of the institutions mentioned will receive state-supported digital yuan after launch.

Regional deployment

Each time a CBDC is launched, the central bank cannot deploy it nationwide on the first day.

Last week, the Chinese government publication Global Times, citing industry sources familiar with the issue, said the system could be launched in Shenzhen primarily for verification. There, local companies, including Tencent and government financial institutions, are exploring the technical foundations to support the development of CBDC.

The PBoC Digital Currency Research Laboratory previously opened a unit called the Shenzhen Fintech Research Institute with the local government and Shenzhen financial regulator for fintech and digital currency projects.

PBoC Digital Currency Research Laboratory has filed more than 50 patent applications to detail the potential design of a state-supported digital renminbi.

According to patent applications, the digital currency of China can only superficially resemble cryptocurrency as a peer-to-peer transaction system, but does not contain most of the functions of the cryptocurrency, such as anonymity and decentralization.

Publication date 09/06/2019
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