China’s crypto competitor is actually being built in a secret office with restricted access.

 

With the intension to beat Facebook’s Libra to market, The People’s Bank of China (PBoC) is currently charging full speed ahead with it’s digital plans.

Someone close to the bank , stated that a hardworking and dedicated team from the central bank’s Digital Currency Research Lab (DCRL) is presently developing the system in a closed-door environment downtown Beijing headquarters, moving away from the PBoC’s

The report stated further that they had the team has been working in this separate location since early summer so that they could full time and concentrate on the project.

Facebook unveiling of it’s vision for Libra in June a global cryptocurrency to facilitate payments has made the team to expedite work towards their project, the source added.

As a matter of fact, the Libra announcement of June by Facebook rattled governments around the world, raising Congressional hearings in the United States and also new bold thinking by central bankers such as Bank of England Governor, Mark Carney.

Though Much about the PBoC’s project is still under wraps, and there have been different and some conflicting accounts about the timetable as well as degree of involvement by major Chinese companies in the project.

closed-loop testing” has begun according to a 4th Sept. report by state-owned media outlet China Daily, for the central bank digital currency (CBDC) to activate payment situations involving some commercial and non-government institutions.

China Daily said in an earlier report that, If things goes as expected, they are targeting the first half of 2020 for its debut, therefore the project could launch sooner than Libra.

Forbes reported last week stating that China’s big four state-owned commercial banks, Union Pay, Tencent as well as fintech giants Alibaba and also an unnamed company, will be the first batch of organizations to receive the CBDC. It could be launched as soon as November.

The stated four commercial banking giants which happens to be one of the largest banks in the world by total assets are Bank of China, China Construction Bank, Agricultural Bank of China, and the Industrial and Commercial Bank of China will receive the CBDC.

But hours following Forbes’ report, Chinese publications Tencent News and Sina said, citing people close to the central bank that the timeline and scope of the eight institutions were not okay as speculated.

Meanwhile a second source who is familiar with the PBoC’s CBDC efforts said that organizations mentioned in the Forbes report have actually participated in the development of the CBDC initiative. But upon the launch
the source would not say whether all or only some of the mentioned institutions will be receiving the state-backed digital yuan

Everything is really shrew in secrecy, a third person who works for one of the mentioned institutions said there’s such work ongoing inside his organization but it’s unclear what the actual contribution is since the details are confidential due to non-disclosure agreements.

Tencent and state-owned financial institutions are researching technical frameworks to support the development of the CBDC.

Whenever the CBDC launches, the central bank may not roll it out nationwide on Day One. the system may be launched in Shenzhen first to test the waters. There, local companies including

An entity called Shenzhen Fintech Research Institute with Shenzhen’s local government and financial regulator was previously launched by the PBoC’s Digital Currency Research Lab to undertake fintech and digital currency-related projects too.

There have been a hiring spree with job advertisements searching for various technical experts including blockchain architects and cryptography specialists to be based in Shenzhen and Beijing by the institution.

More than 50 patent applications to detail the potential design of the state-backed digital yuan has been filled by the PBoC’s Digital Currency Research Lab.

Previously, based on the patent filings, the much expected CBDC may only resemble a cryptocurrency at a surface level and as a peer-to-peer transaction system but will strip off most cryptocurrencies’ decentralization features and anonymity.

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Credits: Wolfie Zhao

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