China May Choose Shenzhen as Headquarters for Central Bank Digital Currency
For several months, the market has been swept by rumours concerning China’s incoming central bank digital currency. So far, the Chinese government has given several details concerning the upcoming project, yet it is important to point out that most technicalities, alongside the release data, are still unknown.
Recent reports indicate that the People’s Bank of China (PBoC) has initiated a research effort in Shenzhen, where it is thought that the CBDC will be headquartered. Choosing Shenzhen is a smart step, granted that the city is commonly regarded as one of the biggest and brightest technological hubs within mainland China.
Therefore, granted the plethora of blockchain experts and developers residing in Shenzhen, alongside the city’s dynamics, it most likely is one of the best places to host the coin. The People’s Bank of China has also recently formed a taskforce which will be in charge of digital payments. The same team may also lead the research and development efforts for the CBDC.
To put things into perspective, the People’s Bank of China has been actively researching the opportunity of launching a central bank-backed coin since 2014, according to a press statement issued by the deputy director of payments and settlements at the PBoC, Mu Changhun. So far, these research efforts have been concluded in 74 patents, so the development team has a lot of material to work with. We hope that in the future, prior to the release of the coin, more data will be released concerning its particularities. Will it be blockchain based? Will transparency of any kind be assured? Will it keep ease-of-use as a central focus point? Will shops and businesses be required to support the CBDC?
Last but not least, it is also important to clarify the rumour concerning a potential release of the CBDC in November. For several days, media outlets have been reporting that China is almost done with its CBDC, which ought to be released in November. As such, in a recent press statement, the PBoC has stated that numerous fake news have been circulating the online environment regarding the CBDC. Therefore, China’s digital currency most likely will not be released in November, since research is still being carried out. In fact, there’s no information on whether development has even begun.
Another important statement worth noting is that the coin will not be classified as a virtual currency, but rather as a legal digital currency. Basically, an e-Yuan, stablecoin that can be received, stored and sent via smartphones and other devices.