The vice-chairman of China’s top economic think tank said on Monday that the People’s Bank of China (PBOC) will be the first central bank to successfully launch a digital currency.
Speaking at the Inaugural Bund Financial Summit in Shanghai on Monday, Huang Qifan, vice chairman of CCIEE (China Center for International Economic Exchanges), said that the PBOC has been working closely on its blockchain-based payments system for years.
He also added that China will be the first in the world to introduce its own central bank-issued digital currency.
“The People’s Bank of China has been studying DCEP (digital currency electronic payment) for five or six years, and I think the technology has matured,” Huang said.
“PBOC is probably the first central bank to introduce digital currency in the world.”
Huang also believes that issuing sovereign digital currencies can help to reinforce monetary distribution rights of countries and should be linked to “sovereign credit, with national GDP, fiscal revenue, and gold.”
Calling Bitcoin and Libra financial products of companies trying to challenge sovereign currencies, Huang said:
“This decentralized currency based on blockchain is out of sovereign money. The basis of the issuance cannot be guaranteed, the value of the currency cannot be stabilized and it is difficult to truly form social wealth.”
As for Huang’s thoughts on Libra?
“I do not believe that Libra will succeed,” he said.
Blockchain for ‘technological innovation and industrial transformation’
On October 24, the Political Bureau of the CPC Central Committee conducted a collective study where Chinese President Xi Jinping discussed the importance of blockchain technology in the “new round of technological innovation and industrial transformation.”
“The integrated application of blockchain technology plays an important role in the new round of technological innovation and industrial transformation,” Xi said.
“We must take the blockchain as an important breakthrough for independent innovation of core technologies clarified the main direction, increase investment, focus on a number of key technologies and expedite the development of blockchain innovation-driven industrial development”
The Chinese president’s comments catapulted the price of Bitcoin by 12% to more than $10,000.
According to a Baidu index of search results, searches for “blockchain” spiked by more than 40 times post Xi’s blockchain discussion.
China shaping the blockchain industry
In a recent interview with a Chinese news outlet CGTN, Helen Hai, head of Binance Charity Foundation, discussed her take on China stepping into the blockchain industry.
“I think currently blockchain technology still at an early stage of development – it is still technology looking for application,” she said.
“What is really needed is industry shapers, so I’m really glad to see China want to play a major role in shaping the industry in the right direction.”
Hai added that blockchain must be trusted without the need for an intermediary and China, as a big country, using blockchain technology, will make it easier to track everything down.
Giving the example of the Binance Charity Foundation, Hai noted that they created a 100% transparent charity transaction process with blockchain technology.
This allows a completely transparent transaction directly between the donor and the beneficiaries.
Despite its hesitancy to embrace cryptocurrencies, China seems to be open to the benefits of the technology – especially in light of its determination to launch the first central bank-issued digital currency.
China’s entry into the space is a huge boost for the future of blockchain technology and a boost for market confidence.