China appoints new digital currency head as race with Facebook’s Libra heats up
- Mu Changchun will replace Yao Qian as the head of the People’s Bank of China’s research subsidiary on digital currency
- Facebook is planning to launch Libra next year, with some suggesting it could strengthen the US dollar’s dominance and sabotage China’s ambition for the yuan
China has taken another step towards creating its own rival for Facebook’s Libra by appointing a new head of the central bank’s research subsidiary on digital currency.
Mu Changchun will replace Yao Qian, who was the first director of the People’s Bank of China’s (PBOC) research institute on digital currency, according to a report published on Friday by the official Shanghai Securities News.
The research institute was set up at the end of 2016 to study the possibility of issuing a sovereign digital currency when commercial tradeable cryptocurrencies started gaining traction before China banned trading in such currencies.
Yao, formerly the deputy chief of the central bank’s technology division, has joined the China Securities Depository and Clearing Corporation as general manager.
Mu said last month that the official currency “can now be said to be ready”, with Shenzhen then given the go ahead for a pilot programme on digital currency research and innovation as part of Beijing’s plan to make it a model city.
According to Mu, China’s sovereign digital currency would be based on the blockchain technology that underpins cryptocurrencies and would be a replacement for cash. In contrast to cryptocurrencies, like bitcoin where decentralised control is held by holders of the currency, the Chinese unit would be centrally controlled by the PBOC, with commercial banks having to hold reserves at the central bank for assets valued in the digital yuan.