A Chinese central bank official has shed new details on the country’s forthcoming digital currency, saying that holders will not receive interest payments. 

According to a report by Reuters on Nov. 5, Mu Changchun, head of the digital currency research institute at the People’s Bank of China (PBoC), said at a forum in Hong Kong that the digital currency is being designed to substitute for existing coins and paper money.

Mu explained that there would not be interest payments made to holders of the digital currency and that the substitution eliminated implications for inflation or changes to monetary policy. Mu also referred to the launch of China’s digital currency as the start of a “horse race” approach:

During the research period, and also the issuance period there will be a horse race approach. The front runner will take the whole market – who is more efficient, who can provide a better service to the public – they can survive in the future.

Mu reiterated concerns from Chinese lawmakers over the impact of Facebook’s libra, saying the digital currency “was definitely a threat to the country’s currency sovereignty.”

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