China’s Digital Currency Making “Smooth Progress” Despite No Official Launch Date

  • China's central bank has made "smooth progress" on the development of a sovereign digital currency despite no official launch date.
  • PBOC will continue research and development on the digital coin into 2020.

The People’s Bank of China (PBOC) said it will continue research and development into the creation of a digital currency in 2020, despite not giving an official launch date. 

According to a report by the South China Morning Post (SCMP), China’s central bank summarized its annual work at a conference held last week, saying it had made “smooth progress” on the development of a sovereign digital currency in 2019. 

The PBOC has been ahead of the curve on central banks innovating with digital currencies, in part due to the country’s contentious stance towards crypto-assets and the emergence of digital coins such as Facebook’s libra. The SCMP report claims that Beijing views Facebook’s libra as a “challenge” to its capital account controls, which expedited the process of the sovereign digital currency and caused rumors that the central bank coin could launch as early as last November. 

The PBOC has been considering the possibility of a sovereign digital currency for about five years. Last month Mu Changchun, the central bank official overseeing the project, said the “top-level design, formulation, functional research and testing” of the digital currency had been completed, leading some to speculate that distribution was eminent. 

At the time, Mu also reiterated that the central bank currency would be a digital replacement for cash, and not a speculative asset such as bitcoin. 

He said, 

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.

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