China’s new chief of Digital Currency Research Institute and a former Deputy Director, Changchun Mu, has declared some of the features developed by the central bank.
Digital Currency with Chinese Characteristics
It has been reported that Mu has released the features of the PBOC’s digital currency and said that it would serve as an electronic payment tool with value characteristics.
“Its functional attributes are exactly the same as paper money, but it is just a digital form.” Changchun Mu
Mu also issued the technical aspects of the digital currency, comparing it side-by-side with Facebook’s Libra. According to Mu, digital yuan can be used for transactions between users without the need for an account or an internet connection. If the users’ smartphones have wallets installed, transactions can be made by putting the two devices close together and sanctioning the near-field communication (NFC) protocol set.
Mu also said:
“Even Libra can’t do this.” Changchun Mu
Mu added that China’s digital currency will be distributed through commercial banks in the same way as fiat currency. Banks are recommended to open accounts with the PBOC, purchase the currency at 100 percent value, and offer them to users through digital wallets that have been registered with financial institutions, commercial organizations or banks.
Similarly, Mu declared that the PBOC has been developing the digital yuan as a way of “planning ahead” in a bid to protect monetary sovereignty.
In many ways, Facebook’s Libra may already be a few steps behind China concerning the launch of digital currency.