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China close to launching cryptocurrency, says central bank, amid pressure from Facebook’s Libra
- Mu Changchun, deputy director for payments at the People’s Bank of China, confirmed cryptocurrency is ‘close to being out’
- Central banks around the world have had to speed up their digital currency plans due to the potential impact from Facebook’s Libra
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The People’s Bank of China is “close” to issuing its own cryptocurrency, according to a senior official.
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The central bank’s researchers have been working intensively since last year to develop systems, and the cryptocurrency is “close to being out”, Mu Changchun, deputy director of the People’s Bank of China (PBOC)’s payments department, said over the weekend. He did not give specifics on the timing.
Mu repeated the PBOC’s intention that the digital currency would replace M0, or cash in circulation, rather than M2, which would generate credit and impact monetary policy. The digital currency would also support the yuan’s circulation and internationalisation, he said.
The remarks signal the PBOC is inching toward formally introducing a digital currency of its own after five years of research. Facebook’s push to create cryptocurrency Libra has caused concerns among global central banks, including the PBOC, which said the digital asset must be put under central bank oversight to prevent potential foreign exchange risks and protect the authority of monetary policy.
“Libra must be seen as a foreign currency and be put under China’s framework of [foreign exchange] management,” Sun Tianqi, an official from China’s State Administration of Foreign Exchange, said.
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