Chinese Conglomerate Tencent Working On A Digital Currency Research Group

25. Dec 2019 Posted by Akolkar B on News

As China looks ahead for aggressively pushing blockchain development, Tencent - the homegrown internet giant and operator of China’s most popular messaging app WeChat - plans to create a digital currency research group.

Local Chinese media iFeng published a report that Tencent is currently looking for a new head of the research group. Tencent’s upcoming digital currency research group will majorly focus on further developments in the digital currency payments industry using the distributed ledger technology.

Tencent is already working on a number of blockchain projects. Tencent has helped in providing the blockchain infrastructure for Shenzhen’s tax service with over 10 million invoices generated. This was an important step by the company in promoting blockchain-based electronic billing.

On the other hand, Tencent recently secured a Hong Kong license that permits it to develop a virtual banking system. Tencent blockchain chief Yige Cai said: “Hong Kong’s new regulations and supervision on digital assets transactions validates the importance of blockchain technology and digital assets, which is good news for the whole industry”.

Besides, the Chinese central bak has already formed a digital currency research institute of its own that focuses on the development of digital yuan. Mu Changchun, the deputy director of PBoC said that the Digital Yuan will be different from public cryptocurrencies like Bitcoin or other stablecoins.

Media outlet South China Morning Post reported that as per the deputy director the Digital Yuan will have no room on speculation of its value. Changchun said: “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.”

Earlier, he also said that the Digital Yuan will function like a two-tier system wherein the central bank - People’s Bank of China (PBoC) - will be at the top and other commercial banks will be in the second tier of the centralized system.

Citing fears of future competition from foreign players like Facebook Libra, China has accelerated its work on the development of central bank digital currency (CBDC). China believes that having a CBDC will help the country get an edge over the global economy.