China’s digital currency will create a “horse race” when it is launched as commercial banks and other institutions compete to provide the best services using the new form of money, a central bank official said on Wednesday, reported Reuters.
China is preparing to be the first country to roll out a digitized domestic currency, a development that is being closely watched by the world’s financial services industries, though few details are currently available.
Akin to Facebook’s proposed Libra digital currency and other cryptocurrencies such as bitcoin, the Digital Currency Electronic Payment (DCEP) project will be powered partially by blockchain technology.
The People’s Bank of China will adopt a two-tier approach with its project, Mu Changchun, the head of the central bank’s digital currency research institute, told a forum in Hong Kong. It will first issue the currency to commercial banks and other institutions, who will then resend it to the general public.