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Chinese Government to be the First to Launch its own Digital Currency

Chinese Government to be the First to Launch its own Digital Currency

The vice chairman of CCIEE (China Center for International Economic Exchanges), Huang Qifan, stated that China will be the first country in the world to launch a usable digital currecy.

According to PanDaily, Qifan made this statement after he firmly expressed his doubt about Facebook's Libra being successful. He said “In the digital age, some companies tried to challenge sovereign currency by establishing financial products such as Bitcoin and Libra. This decentralized currency based on blockchain is out of sovereign money. The basis of the issuance cannot be guaranteed, the value of the currency cannot be stabilized and it is difficult to truly form social wealth. I do not believe that Libra will succeed”. This claim comes as no surprise since Libra got abandoned by many of its major investors (Read More). 

Huang puts his trust in digital currency being able to counteract US hegemony over the monetary jurisditcional world through SWIFT (Society for Worldwide Interbank Financial Telecommunication) system and CHIPS (Clearing House Interbank Payments System). He also discredits those systems by calling them inefficient. Qifan adds: "SWIFT is an outdated, inefficient and costly payment system. Since the establishment of SWIFT 46 years ago, the technology has been updated slowly and the efficiency has been relatively low. International wire transfers usually take 3-5 business days to arrive. Large remittances usually require paper documents, which presents additional difficulty for processing large-scale transactions effectively,” Huang expressed throughout his speech. “At the same time, SWIFT usually charges a fee of one ten-thousandth of the settlement amount, and has obtained huge profits by virtue of the monopoly platform".

Huang believes that for governments to gain back sovereignty and to redistribute power, central bank issued digital currencies are the answer. He ends with “The People’s Bank of China has been studying DCEP (digital currency electronic payment) for five or six years, and I think the technology has matured. PBOC is probably the first central bank to introduce digital currency in the world".

China's already making big moves in the crypto wolrd as it has been researching the application of blockchain technology in cross-border financing (Read More).

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