China: private banks help launch booming digital yuan
The country is leading the way in developing a state-backed digital currency like Bitcoin (Go to Buy Bitcoin at eToro guide) – and banks are joining the cause.
China’s private banks join in
Some Chinese private banks are joining in the launch of the Crypto Superstar country’s upcoming digital currency, according to local reports. Officially called „Digital Currency, Electronic Payment“ (DCEP), the launch of the so-called digital yuan is planned for 2022.
More than 2 billion yuan ($309.30 million) has been spent so far in 4 million separate transactions using China’s new digital currency, PBoC Governor Yi Gang said in November. These have been facilitated by state-owned banks in the past, but now private firms are getting into the race.
MYBank, an online bank backed by Alibaba’s fintech giant Ant Group, is one of those companies. MYBank says it would push ahead with the trial „in accordance“ with the overall order of the People’s Bank of China (PBoC), the country’s central bank and issuer of the digital yuan.
Tencent-backed WeBank is also participating in the digital yuan pilot, a report by state-backed China Securities News confirmed. However, the firm did not respond to comments about its participation.
The two firms will soon appear on the PBoC’s official digital yuan app, which was launched last year and used in isolated trials to „drop“ digital yuan to registered Chinese citizens.
The move is the first by China’s private financial companies and banks, compared to previous attempts in which only state-owned banks participated. MYBank and WeBank’s e-wallets are similar to those offered by the six state-owned credit institutions in previous trials.
Blockchains on the rise in China
In addition to digital currencies, state-backed blockchain systems are also on the rise in China. According to previous reports, China’s Blockchain Service Network (BSN) has already gone live in over 80 Chinese cities – the open-source protocol layer serves as a foundation for companies to build Ethereum-based enterprise solutions.
The BSN is itself based on Ethereum and is available through public city nodes across mainland China.
According to an earlier report, China plans to track all transactions over $14,000 using the digital yuan in the coming years. This is to prevent fraud, money laundering, and even a possible outflow of capital from China to foreign countries.