China has shed some light on some minor details regarding its long-planned sovereign digital currency. An official from the country's central bank mentioned that the planned digital currency will unfortunately not be open to public speculation like other cryptocurrencies. The official clarified that China's digital currency will in no way be similar to Bitcoin.
The head of the People's Bank of China digital currency research institute, Mu Changchun, mentioned on Saturday that the country's planned cryptocurrency will simply be a digital form of the Chinese Yuan. Given this fact, there will apparently be no form of speculation for its value as it will not be backed by a basket of other currencies.
Mu stated that they have designed the digital currency in a way that the public should not be able to speculate its value. The official stated that it will not require the support of other currencies.
Mu also gave an update of the status of the country's digital currency, stating that the design, formulation, reseathe rch, testing, and function of its so-called Digital Currency Electronic Payment has been completed. China's central bank plans to slowly roll out pilot programs prior to the official launch of the digital currency.
An exact date of when the digital currency would be launched was not specified. However, it is unlikely to be launched before the official release of Facebook's own cryptocurrency project Libra, which is scheduled to be launched next year. Facebook's cryptocurrency will be backed by a number of underlying assets, which means that the public can speculate on its value.
Cryptocurrency enthusiast and Chinese traders were disappointed with the news, with some stating that there would be no point to the virtual currency if they cannot speculate on its value. A number of traders have pointed out that the digital currency will just be another form of the yuan, which means that it cannot really be treated like other cryptocurrencies that are backed by real blockchain technology.
China has been very careful in the development of its own virtual currency, which it sees as a vital step to ensure its financial security. China has acknowledged the need to establish its own digital version of the yuan as it moves forward into the fully-digital era.
The country also believes that it needs to have the digital currency to deal with potential financial threats such as Facebook's Libra cryptocurrency. Over the past few years, China has been accelerating its crackdown of Bitcoin and cryptocurrency trading, which it also views as potential threats to its capital account control.
