The People's Bank of China has stated that time is drawing near for it to release its own cryptocurrency. "The bank's researchers have been working intensively since last year to develop systems, and the cryptocurrency is close to being out", stated Mu Changchun, deputy director of the PBOC's payments department.
The intention behind the issuing a large scale cryptocurrency is to replace cash in circulation, in a bid to clamp down on fraud and criminal activities. The digital currency is said to support the yuan (the currency unit of renminbi), which will continue to circulate as the cryptocurrency is implemented. The PBOC has taken measures to mitigate any risks in introducing a cryptocurrency, in order to prevent any foreign exchange risks.
Unlike currently active blockchain systems which remain decentralised, the new cryptocurrency is intended to support Beijing's financial system. The cryptocurrency system will be implemented by allowing Chinese citizens to use their digital wallet to swap yuan for the cryptocurrency, allowing the PBOC to keep track of the money trail, thus putting an end to money laundering and other financial crimes. In August 2019, The cryptocurrency is due to be released to the public and will change the face of banking, globally.
Last week Monday, the Chinese yuan tumbled in a historic RMB7.0 to the dollar, causing an instantaneous global crisis. Markets, thrown into a frenzy, over the possibility of a currency war, an endless loop of depreciation, havoc amongst potential investors, causing a potentially volatile spiral in trade and growth.