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China’s Central Bank to launch its own cryptocurrency

The People Republic of China is preparing to launch its own cryptocurrency. The Chinese Government have been working on the project for the past six years, and the announcement by the Libra consortium that it intends to roll out a worldwide digital currency, accelerated the plan. China’s Central Bank officials fear that Libra may make the digital yuan obsolete, and they are now determined to launch within the next few months.

The value of the new cryptocurrency will be tied to that of the yuan, therefore making it a stablecoin. The Government will also be able to monitor every transaction, thus removing anonymity and reducing the risks of illicit use. According to Princeton University historian Harold James, the launch of the currency may have a massive impact on the financial markets worldwide, as the digital yuan could easily rival the dollar as an international means of payment.

Erik Nelson of Wells Fargo Securities is more cautious, as he sees Chinese governance and the country’s resistance to opening to foreign investors, as the main stumbling block for the digital yuan to become the main reserve currency*.