The Chinese monetary authority has identified digital currency as one of the nation’s most important infrastructure areas in the coming years, and the global community is expecting the birth of a digitalized renminbi this year. 

Some of our foreign friends complain that sometimes it’s inconvenient to use mobile payments like WeChat Pay and Alipay. Because they cannot transfer money without a Chinese ID card or bank account. 

 

 

However, the situation will change soon. 

 

It is said that people will be allowed to use the digital currency without first having to open a bank account with a Chinese bank. (Click here to read our previous article.) 

 

△ Mu Changchun, director general of the PBOC Institute of Digital Currency, said the digital currency will be accessible to those without bank cards. 

 

 

COMING SOON

 

Senior officials from the People’s Bank of China, the central bank, said recently that the testing of the central bank’s “digital currency and electronic payment,” the so-called DC/EP, had already finished. 

 

There are some experimental areas for the DC/EP pilot program for further testing the application scenarios and service scale. 

 

According to Fan Yifei, vice-governor of the PBOC, the functions of the digital sovereign currency still need to be improved. 

 

Although few new details have been disclosed, some basic ideas of the DC/EP design and issuance structure have not changed from the initial version. 

 

The for­mer head of one of Chi­na’s big state-owned banks says the statu­tory dig­i­tal cur­rency slated for im­mi­nent re­lease by the Chi­nese cen­tral bank will have sweep­ing im­pli­ca­tions for the coun­try’s fi­nance and mon­e­tary sys­tems. 

 

Ac­cord­ing to a re­port from Sina at least 15 com­pa­nies are help­ing PBOC with the de­vel­op­ment of its statu­tory dig­i­tal cur­rency, in­clud­ing big state-owned banks, Chi­na’s big three tele­coms com­pa­nies and some of its lead­ing tech com­pa­nies. 

 

These companies reportedly include: 

• In­dus­trial and Com­mer­cial Bank of China (ICBC) 
• Agri­cul­tural Bank of China (ABC) 
• Bank of China (BOC) 
• China Con­struc­tion Bank (CCB) 
• China Mo­bile 
• China Tele­com 
• China Uni­com 
• Ten­cent 
• Huawei 

FAQs

 

• Who will issue the digital RMB? 

The PBOC will be the only legal body to issue the digital RMB, not directly to customers, but to institutions including retail banks. 

 

Then the institutions will distribute the digital currency to users, much as the physical currency is issued now. 

• Will it be fully anonymous? 

As a digital currency, transaction information about DC/EP can be recorded and tracked. If the central bank has the right to check the information it will pose a threat to privacy. 

 

 

But a fully anonymous digital currency may encourage illicit transactions, such as terrorist financing and money laundering. So the digital RMB will be “controllable anonymously”.  

 

• What are the advantages of digital currency? 

To replace paper money, the digital currency can record information of real-time transactions, including criminal transactions and money laundering. 

 

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SOURCE | China Banking News / CD

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