The central bank of China has moved yet one step closer to issuing the digital yen, as per The Global Times report.
The People’s Bank of China is said to be working in collaboration with private companies and has completed the development of its sovereign digital currency. They have now moved on to drafting laws for the circulation of the currency.
It has been previously reported that several private companies like Alibaba, Tencent, Huawei, and China Merchant Bank are involved in the development of China’s digital currency.
Reportedly, the financial arm of Alibaba, Alipay filed for five patents related to this digital currency between January 21 to March 17. These patents cover different aspects of digital currency including issuance, transaction recording, digital wallets, and anti-money laundering.
“Judging from the patents, the first step of technological development has been basically completed,” an insider has been quoted as saying by the media outlet. But there is no launch date as of yet as the next step would be the lengthy legislation process.
Cao Yan, vice director of the Advanced Research Institute of Blockchain told the Global Times that in the face of the novel coronavirus, the central bank should accelerate the launch of its official digital currency.
“If there is a chance China is considering lowering its interest rate into negative territory as an final option and directing such policy to commercial loans and lending, a circulated digital currency rather than M0 will be able to achieve that,” said Cao.
The report of China’s digital yen making progress came hot on the heels of the US considering creating a digital dollar.
The House Democrats introduced the concept of a digital dollar in the coronavirus rescue draft bills of “Take Responsibility for Workers and Families Act” and the “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act,” to save the US economy from the impact of the coronavirus pandemic.
“Not the digital dollar we hoped for but a step in the right direction to deliver funds quickly to more people,” said Catherine Coley, CEO of Binance.US about this development who recently talked about stablecoin being a better option for sending the stimulus to the population.
But before it could go further, the language was reportedly dropped out of Speaker Nancy Pelosi’s stimulus package.
However, the legislation related by Chairman Maxine Waters in the House Financial Services Committee still mentions the digital dollar and digital wallet.
If proposed, this would be big as when Chinese President Xi Jinping brought up blockchain in October last year, the Bitcoin price surged 42% within a day.
“USA announcing ‘Digital Dollar’. Doesn’t change much. It’s still the USD. A currency being printed with infinite QE. BTC has 21M Supply. The exact opposite. Nonetheless; bullish for blockchain & crypto in general,” said trader Crypto Michael.