China, through its central bank, is rapidly moving into the digital currency sphere and is being aided by big tech companies like Alipay a report by Global Times has revealed.
The People’s Bank of China is ever closer to finding a final solution to the token, with reports claiming that the foundational aspects are almost complete, with legislation also being drafted.
Aiding the PBoC in their research and building are the major tech companies of China, selected for their experience in blockchain and third party payment. Shenzhen based companies, Alibaba, Tencent, Huawei and China Merchants Bank are all reportedly helping the effort.
Alibaba’s Alipay is leading the way in the development of the token after they released five patents related to the CBDC between January 21 to March 17. According to Jinse, the patents are related to the issuance, transaction recording, digital wallets, anonymous trading support and assistance in supervising and dealing with illegal accounts.
Although many believed the medical crisis brought on by the Coronavirus outbreak would slow down the pace of the CBDC research and implementation, it would appear that the plan is still going ahead despite the grim financial outlook for central banks globally.
China’s CBDC to revolutionise global politics?
More details have slowly been dripped to the media since the PBoC announced their intentions to create the digital currency. The token is rumoured to be used in the retail sector and won’t be backed by blockchain.
In an interesting development in terms of global politics and finance, recent reports have suggested the digital token will be integrated into the Belt and Road Initiative, with nations involved in the project to utilize the token.
The creation of the token has left many commentators in the West worried about the global implications of this token. Some believe it could lead to a Chinese dominance of the global economy in the future, especially with its international outlook.
Facebook CEO Mark Zuckerberg alluded to this latent threat in his Congressional hearing about the Libra token, warning the politicians and lawyers there that, “if America doesn’t innovate, our financial leadership is not guaranteed.”
In response to China’s plans, other Asian nations have looked to counteract the possible threat. Japan, a nation with a rich history in terms of digital currencies, has signalled their intentions to create a national digital currency.