As much as China shows disapproval towards cryptocurrency, it is now introducing its own form of virtual currency. The People’s Bank of China (PBOC) has announced that China’s official digital currency (CBDC) “can now be said to be ready”. However, there’s no mention of just when the currency would be ready.
The currency will rely on a two-tier split, with the People’s Bank on top and commercial banks below. It will apparently help deal with the size of China’s economy and population. Unlike other cryptocurrencies, it’s backbone will not entirely depend on a blockchain. This is because the PBOC wanted to make sure the currency had enough throughput to keep up with retail usage.
China’s official digital currency seems odd as it has a less-than-friendly stance on cryptocurrency. The country’s regulators have always considered banning cryptocurrency mining. However, analysts believe that it was the country’s efforts to have control over its cryptocurrency market. The introduction of a digital currency would help China reduce the appeal of coins outside its control. Doing something as big as introducing a new currency is no small feat. As per the source, this is why it probably took five years for the PBOC to bring this project out of the R&D stage.