The rumors of People’s Bank of China (PBoC) developing a yuan-backed cryptocurrency are now starting to look like facts, as former PBoC employee Paul Schulte confirmed that China’s government bank is close to finishing their crypto project, dubbed DC/EP (Digital Currency/Electronic Payments). Schulte states that the two largest banks in the world – Industrial and Commercial Bank of China and the People’s Bank of China would utilize PBoC’s new digital currency. Alongside the two banks, other parties will also receive the new cryptocurrency – Alibaba and Tencent, as well as the Agricultural Bank of China and Union Pay.
The technology behind the DC/EP coin has been finished since 2018, according to a former Chinese government employee. The unofficial launch of the new crypto project is likely to be on 11th November 2019, since this is one of the most intensive shopping days in China – Singles Day.
The five organizations and the Chinese government will have the task to disperse the yuan-backed coins to their customers, with plans of partnership with Banks and large-scale companies in the United States.
PBoC’s plans come amid Facebook preparing to launch Libra – a cryptocurrency backed by a basket of central bank-issued fiat currencies. What differs Libra from DC/EP, however, “is the stage of readiness. While Libra is still being developed, PBoc’s currency is completely ready and awaits deployment.” Schulte added.
Mu Changchun, Deputy Director of the payment department and Head of Crypto Research at PBoC, also confirmed the two-stage dispersion model that the bank offers. PBoC plans to control the number of coins in circulation by giving their partners the option to buy DC/EP with yuan. This way, companies decide and regulate the amount of the new currency they will be offered to customers and partners.
The most significant advantage of the DC/EP network over Facebook’s Libra is the transactions-per-second (TPS) count. While Facebook claims only 1,000 TPS, DC/EP is anticipated to perform 300 times faster. During the last Singles Day, as much as 92,771 transactions per second drowned payment platforms, but Mu is confident the numbers are well within the capabilities of their new platform.
Mu’s statements at the China Finance 40 Forum come amid Chinese yuan falling to its lowest prices from a decade – 6,9225 renminbi per $1. U.S. President Donald Trump’s accusations about China being a “currency manipulator.” The tension between the United States and China could affect the DC/EP adoption outside China, like the Case of Venezuela’s state-run oil-backed cryptocurrency Petro.