- Mu Changchun, central bank veteran in charge of the plan for virtual yuan says it will not need the backing of a basket of currencies
- Chinese internet users unimpressed by no speculating on the virtual currency part
China’s new sovereign digital currency would not be open to speculation like other cryptocurrencies, said a Chinese central bank official on Saturday.
Mu Changchun, head of the People’s Bank of China’s digital currency research institute said it would be a “digital form of the yuan” that wouldn’t need the backing of a basket of fiat currency.
“The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies,” Mu said.
The central bank official said that the design, formulation, and functional research and testing of the Digital Currency Electronic Payment have been completed. The next step is to roll out the pilot programs before it is launched.
But Chinese internet users aren’t excited about the idea that there would be no speculating on the virtual currency.
“So there will be no fun in it,” one person commented. Another said on news portal Sina.com, “The digital currency is just another form of the yuan, but cryptocurrencies that use real blockchain technology can be treated like gold and silver.”
However, there is no time frame for introducing the central bank-backed digital currency as of yet.
Any Chinese bank or company hasn’t officially confirmed their participation in this digital currency plan either but earlier this month there have been reports that the big four state banks and three state-owned telecom companies are involved in the process.
Meanwhile, Beijing has been cracking down on trading of Bitcoin and other digital currencies and seeing Facebook’s stablecoin Libra as a potential challenge to its capital account control. As the bitcoin price climbs back above $7,600 just a few days before Christmas, it will be interesting to see what is on the 20/20 horizon for everything the crypto world has become in the last decade and will surely blossom and grow in the upcoming decade.