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China’s Digital Currency To Be Transacted Through Physical Contact Against Facebook’s Libra Cryptocurrency.

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Last updated on December 31st, 2019 at 07:00 am

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HuAccording to Shanghai Securities News, Mu recently published details on PBoC’s digital currency – apparently being carried out in a secret office away from the bank’s Beijing headquarters.

He described it as a digital currency and electronic payment tool with “value characteristics.”

My Changchun

“Its functional attributes are exactly the same as paper money, but it is just a digital form,” Mu said.

Perhaps most notably, he set out some of the digital currency’s technical aspects, and compared it with Facebook’s Libra.

PBoC’s digital yuan will be able to be transferred between users without an account and without a mobile or internet network, reads Mu’s report. Ones a user’s mobile phone has a wallet, the digital currency can be transferred to another person by placing the two phones in physical contact. Presumably, this feature is enabled by near-field communication (NFC).

“Even Libra can’t do this,” Mu said.

PBoC’s digital currency also doesn’t need a bank account to be used, and is “free from the control of the traditional bank account system,” Shanghai Securities News cites Mu. 

This feature he says, allows users to preserve their privacy when using the system.

Moreso, the digital currency will be issued through commercial banks like fiat currency. The banks will have to open account with the PBoC and buy the token at 100 percent value. After that, users may open digital wallets for the digital currency through the banks or commercial organizations.

According to the report, the main reason for developing the digital currency is “planning ahead” to protect monetary sovereignty and China’s legal currency. This equally suggests that banks are apparently trying better ways to push Facebook’s Libra down the line. 

Mu Changchun, deputy director of the People’s Bank of China’s payments department, said the development of the coin would help protect country’s foreign exchange sovereignty as commercial applications of such currencies grow.

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