After Libra revealed its white paper, a lot of geopolitical and financial analysts speculated about China’s potential answer. A little less than a month later, rumors began surfacing that China was already in development of its own digital currency to counter Libra.
Last week, The People’s Bank of China (PBoC), claimed that the counter-cryptocurrency is now ready. Mu Changchun, a deputy director in the PBoC stated that a prototype has successfully been developed now.
Mu explained that this prototype adopts blockchain architecture and becomes a reality after more than 5 years of research. The announcement was made at the China Finance 40 Forum and was initially reported by the Chinese news site Shanghai Securities News.
The answer to Libra is created with China’s incredible population size in mind
He also underlined that it would be incredibly difficult to issue a digital currency via a pure blockchain architecture in a country as large as China. One of the biggest issues is that Chinese retailers require high concurrency performance.
According to the limited information, the upcoming cryptocurrency will adopt a two-tier operating system. This will be done in order to cater to China’s incredibly complex economy, vast territory and extremely large population.
PBoC will be placed alone on the highest level, while smaller commercial banks will be placed on the lower level. Mu believes this will improve the overall accessibility and rapidly increase the adoption rates among the Chinese people.
Blockchain tech will also be promoted among many commercial entities. Mu says that the PBoC designed the currency to be suitable for “small-scale retail and high-frequency business scenarios.
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Tags:China answerChina complex economyChina Finance 40 ForumChina Libracounter-cryptocurrencyLibra answer