- The deputy director of the Central Bank of China, Mu Changchun, has announced in an interview that the digital yuan will be significantly different from Bitcoin and also Stablecoins.
- The pilot program to test the digital yuan is expected to start earlier than expected by the end of this year.
The Chinese news agency South China Morning Post reported two days ago about new advances that the digital Yúan has over other cryptocurrencies. The head of the PBoC’s research centre explained that the digital yuan will be significantly different from Bitcoin, Ethereum and other Stablecoins.
Digital Yuan not suitable for speculation and therefore fundamentally different from Bitcoin
The digital yuan is not suitable for speculation and does not get its value from a broad basket of currencies as is the case with Facebook Libra, for example. The deputy director of the People’s Bank of China (PBoC), Mu Changchun, explained:
The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies.
China is planning to launch a pilot project by the end of this year, with the PBoC acting as head of this operation. The largest commercial banks of China as well as China Telecom and some other heavyweights of the tech industry are involved. The first test run will be carried out in Hebei Province, Zhejiang Province and Shenzhen City.
Initially, there is an upper limit so that only small amounts of money will be transferred for the time being. Changchun also stresses that the digital yuan is a supplement to the yuan that continues to exist and that no competition or immediate abolition of cash is planned. China is thus taking on a pioneering role and could overtake other nations in the long term.
Competition for digital central bank currency
Meanwhile, the European Central Bank has announced that it will set up a task force to promote the development of the digital euro. France will also be the first country to test the digital euro in a test environment between banks and a number of selected companies.
Facebook Libra continues to face resistance, both at the political level and from the local population. Libra still has a trust problem due to Facebook’s past data scandals. Nevertheless, Libra has recently presented a new roadmap, which gives an outlook on further developments of the project for the year 2020.