China Central Bank Ready with State-Backed Crypto

Reports surfaced that People’s Bank of China was almost ready to take Alibaba and Tencent onboard its digital asset program, but state-backed media deny the news.

People’s Bank of China may be ready with the issuance of its state-backed digital asset, and even take some of the leading Chinese businesses on board, such as Tencent and Alibaba, reported Forbes.

The report is based on the testimony of a former employee of PBoC, Paul Schulte. He stated that the bank may extend its digital asset to Commercial Bank of China and Bank of China, two of the largest local commercial banks.

However, media close to the government state that the report is an exaggeration and the central bank will not issue a digital coin any time soon.

https://twitter.com/globaltimesnews/status/1166544019192549376?s=20

PBoC has worked for years on its digital asset, and has been extremely conservative with its readiness for innovation. This made skeptics doubt the reports of a quick and mass launch without further preliminary testing.

Still, the Forbes report cites sources close to the central bank, and holds up the expectation that the new digital coin would be distributed to seven leading companies, subsequently reaching 1.3 billion Chinese citizens. The source also mentioned that the asset would be distributed to international banks in the future. But there is no deadline for the launch of China’s digital coin.

Chinese investors and traders were highly active in 2019, boosting trading volumes and generating high demand for Tether (USDT). But the Chinese government has remained conservative and restrictive when it comes to ICOs and other investment schemes that may hurt personal finance. Paradoxically, Chinese investors were targeted by one of the biggest crypto scams in 2019, the Plus Token pyramid.

China’s intended state-backed cryptocurrency is an answer to the unregulated, rampant adoption of both Bitcoin (BTC) and multiple altcoins over the years. China has banned the offering of crypto-to-fiat exchanges, thus strangling one of the sources of liquidity, but the place of the yuan was taken by the USDT stablecoin.