Commercial Banks Should Increase Blockchain Application, Says China Central Bank Official

  • Li Wei wants the commercial banks to embrace digital finance
  • PBoC likely to be the world’s first central bank to launch a digital currency – Huang Qifan, CCIEE vice-chairman

Commercial banks should step up the application of blockchain technology to embrace digital finance, Li Wei, the head of the People's Bank of China’s technology department, said at a forum in Shanghai on Monday.

These comments from a Chinese central bank official came after last week, Chinese President XI Jinping said the country’s development of blockchain technology should be sped up. He stressed on seizing the opportunity before other nations and take a leading position in this nascent field.

Last week itself, a cryptography law was also passed, which is to go into effect on January 2020. This puts developing new cryptography officially under the legal realm that requires following the CCP standard for all “encrypted” behaviors.

Dovey Wan, the founding partner of Primitive Capital said is pushing out the legal and political foundation for China’s upcoming digital renminbi (RMB) that is expected to roll out by year-end or early next year.

All these moves came just a few days after Facebook CEO Mark Zuckerberg warned the Congress, during his testimony regarding the crypto project Libra, that if America doesn’t take positive steps toward crypto regulation, China is moving quickly to launch its digital currency which would take over the leading position.

PBoC likely to be the world’s first central bank to launch a digital currency

In another event, Huang Qifan, vice chairman of the China Center for International Economic Exchange (CCIEE) said the People's Bank of China’s digital currency has matured.

At the first Bund Financial Summit today, Qifan said,

“after five years of research, the central banks of China is likely to become the world’s first bank to launch a digital currency.”

The digital currency is first converted to commercial banks and financial institutions and then to the public. The idea here he said is not to digitize the existing currency but the substitution of M0 which is instrumental to the circulation and internationalization of the fiat currency RMB.

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