According to Cointelegraph, the People’s Bank of China (PBoC) has claimed that its digital currency “can now be said to be ready.”
The central bank’s deputy director Mu Changchun, said that a prototype built on blockchain architecture has been successfully developed after five years of research. He made this announcement at the China Finance 40 Forum, and Shanghai Securities News later reported it.
In his comments Mu reportedly said “issuing a digital currency using a pure blockchain architecture would be difficult to achieve in a country as big as China because retailers require high concurrency performance.”
However, the solution is to adopt a two-tier operating system to cater to the nation’s “complex economy with a vast territory and a large population.” This will entail PBoC being on an upper level, while commercial banks occupy the secondary level. Mu said this would improve “accessibility, enhance adoption rates among the public, and promote innovation among commercial entities.”
Furthermore, another PBoC executive said that China’s digital currency is designed to be suitable for “small-scale retail high-frequency business scenarios.”
Despite Mu saying that China’s digital currency is “ready”, the bank has not yet named a date for the launch. Over the last few weeks there has been talk in the media about China’s issuance of a digital currency, particularly as a means of thwarting any potential dominance of the market by Facebook’s Libra, and of course it also comes as China and the USA continue a trade war over tariffs.