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China Clarifies Digital Currency Launch Rumors but Barely Kills the Hype

Last Updated October 3, 2020 5:47 PM
Ali Martinez
Last Updated October 3, 2020 5:47 PM
  • The People’s Bank of China addresses rumors about its digital currency launching in Q1 2020.
  • Speculations mount about the government-backed cryptocurrency.
  • A few details are known about the upcoming digital renminbi.

The People’s Bank of China has made an official statement to refute reports of an impending digital currency launch. This was meant to brush aside rumors about the launch of a government-backed cryptocurrency by Q1 2020.

In a loosely-translated statement on its official website, the central bank stated:

 The People’s Bank of China has not issued legal digital currency (DC/EP) and has not authorized any asset trading platform to conduct transactions. The People’s Bank of China has been studying the legal digital currency since 2014 and is still in the process of research and testing. The market transactions “DC/EP” or “DCEP” are illegally set digital currency, and the legal digital currency issuance time is inaccurate.


The People’s Bank of China Addresses Rumors

The announcement comes after Jack Lee, the founder and managing partner of HCM Capital, a private equity firm backed by Foxconn Technology Group, indicated that the digital renminbi could be unveiled in the coming two to three months .

China’s central bank has confirmed it has been researching a digital renminbi since 2014. | Source: Shutterstock.com

In an interview with CNBC, Lee stated that the PBOC had already developed a framework dubbed the Digital Currency Electronic Payment (DCEP). With it, China’s central bank would be able to issue a digital currency to commercial banks in a trial phase.

Lee stated:

So, they already have all the system and the network ready. I think you will see it very soon, in the next maybe two to three months.

Few Details Known

Little to nothing is known about the digital renminbi that the PBOC is developing. Last week, a blockchain-related deal between the PBOC and telecom company Huawei Technologies was announced. This was viewed as another sign that the central bank was fast-tracking the launch of the state-backed crypto. However, the first version of the government-backed cryptocurrency would be issued to commercial banks and third-party payment networks by Alipay and WeChat Pay, according to Jack Lee.

Additionally, Mu Changchun, the head of the digital currency research institute at the PBOC, recently stated that users of the centralized digital currency would be guaranteed ‘controllable anonymity’ as long as they are not engaging in illegal activities. Changchun added that the PBOC was not ‘seeking full control of the information of the general public’ and that it would provide anonymity in their transactions to those people who demand it.