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Cryptocurrency
EconomyChina Economy

China’s sovereign digital currency ‘progressing well’, central bank says, but still no launch date

  • People’s Bank of China says research and development work will continue in 2020
  • Beijing is keen to create a digital currency to offset perceived risks posed by bitcoin and Facebook’s Libra

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The People’s Bank of China said it made “smooth progress” on the development of a sovereign digital currency in 2019. Photo: Reuters
Zhou Xin

China’s central bank said on Sunday it will continue with its research and development into the creation of a sovereign digital currency in 2020, but fell short of saying when it might be launched.

In a summary of its annual work conference held last week, the People’s Bank of China (PBOC) said it made “smooth progress” on the issue in 2019.

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The PBOC was one of the first central banks to promote the idea of a digital sovereign currency, partly because Beijing regards cryptocurrencies like bitcoin as a threat to financial security, and other digital currencies, like Facebook’s Libra, as a challenge to its capital account controls.
When the bank’s digital currency research institute stepped up its rhetoric on the issue last year – after plans for Libra’s launch were announced in June – there was speculation that a Chinese sovereign currency could arrive as early as November.

A report by Forbes in August, citing an unidentified source, said the cryptocurrency was set to be launched on November 11 to coincide with the Singles’ Day online shopping promotion, but that did not happen.

The PBOC is not alone in the world in considering how best to adapt to digital currencies.

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Sweden’s Riksbank said last month it had awarded a one-year contract to professional services firm Accenture to build a pilot platform for a new digital currency called e-krona, with the aim of broadening the central bank’s “understanding of the technological possibilities”.

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