Quick Recap of What we know this far.
# It probably will not be using blockchain technology despite the huge endorsement of the technology by Chinese President Xi Jinping.
# The DCEP (Digital Currency Electronic Payment) is more akin to a digital currency and not exactly a cryptocurrency.
# Anonymity of transactions will most likely be true for users, but the government will be able to see transaction details as well as identities of users.
# Originally, China has no plans to release a cryptocurrency this year, while it may seem that recent new is contrary to that fact, there is still no release date for DCEP as of today. (Oct 31)
# DCEP is not a carbon copy of Libra nor would it compete with Libra, the government of China still has a ban on cryptocurrency.
China continues to shake the cryptocurrency world up with the announcement of DCEP (digital currency electronic payment). At the Shang Bund Summit on Oct 28th Huang Qifan, Vice President of China Center for International Economic Exchanges discussed, at the Shanghai Bund Summit the official details of DCEP and some background.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">... <a href="https://twitter.com/hashtag/PBOC?src=hash&ref_src=twsrc%5Etfw">#PBOC</a> has been studying <a href="https://twitter.com/hashtag/DCEP?src=hash&ref_src=twsrc%5Etfw">#DCEP</a> for five or six years, and is likely to be the first central bank in the world to launch a digital currency," said Huang Qifan, Vice President of <a href="https://twitter.com/hashtag/China?src=hash&ref_src=twsrc%5Etfw">#China</a> Center for International Economic Exchanges, in <a href="https://twitter.com/hashtag/BundSummit?src=hash&ref_src=twsrc%5Etfw">#BundSummit</a><a href="https://twitter.com/hashtag/stablecoin?src=hash&ref_src=twsrc%5Etfw">#stablecoin</a><a href="https://twitter.com/hashtag/digitalcurrency?src=hash&ref_src=twsrc%5Etfw">#digitalcurrency</a><a href="https://t.co/2M2lKKAWoA">pic.twitter.com/2M2lKKAWoA</a></p>— China Finance 40 Forum (CF40) (@ChinaFinance40) <a href="https://twitter.com/ChinaFinance40/status/1188718092060364800?ref_src=twsrc%5Etfw">October 28, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
According to Huang Qifan:“the People’s Bank of China (PBoC) has been studying DCEP for five or six years and is likely to be the first central bank in the world to launch a digital currency.”
“DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”
Along with the benefits and the reasons behind the decision to launch DCEP. He also suggested that Libra, Facebook’s foray into the cryptocurrency space, would fail.
“I personally don’t believe Libra will succeed,” said Huang. “Some companies attempt to challenge sovereign currency by issuing bitcoin or Libra. The decentralized blockchain-based currencies are not supported by sovereign credit and hard to become real wealth.”
The PBoC recently ramped up the work on the cryptocurrency in response to Facebook’s announcement of Libra. China has seen Libra, as well as many other cryptos as a threat to the country’s financial sovereignty.
The best way for sovereign countries to exercise the right of issuing currency is for governments and central banks to issue sovereign digital currency, said Huang Qifan.
Furthermore, the bank’s cryptocurrency aims to protect, while also possibly competing with WeChat and Alipay. In July of this year, the phrase, "Libra will compete with Alipay and WeChat," was the second hottest search on Chinese social platform Weibo.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">China is paying attention - "Libra will compete with Alipay and WeChat" is now the 2nd hottest search on Weibo (Chinese Twitter). <a href="https://t.co/nsMJ4kvHvC">pic.twitter.com/nsMJ4kvHvC</a></p>— cnLedger (@cnLedger) <a href="https://twitter.com/cnLedger/status/1151758286447759360?ref_src=twsrc%5Etfw">July 18, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
President Xi’s recent endorsement of Blockchain technology has certainly increased the spotlight on the nation in the eyes of crypto enthusiasts world-wide. As more announcements continue to roll out from the nation may investors should be keen to see the direction China will take.
China is now one of several countries aiming to release a digital currency from its central bank and many are watching to see if it will be China’s DCEP or Libra that can release first. With the quagmire Libra is going through with governments it isn’t a surprise most bets are on China.