The digital currency will be linked to the Yuan and will be controlled by the state. It will allow Chinese companies and organizations to avoid the sanctions of the United States.
Mu Changchun, director of the payment department of the Bank of China, confirmed the launch of a cryptocurrency similar to Pound, but under government control. According to the official, this creation would aim to protect the country's digital sovereignty.
This new digital currency would be linked to the traditional currency used in China, the Yuan.
A point of singular importance is that it is unlikely to use blockchain technology to keep track of commercial exchanges. This component is key in the security and authentication of most cryptocurrencies.
Instead, the virtual Chinese currency would be under government control and supervision. According Mu The currency would be as safe as paper money issued by the central bank.
The project is not a last minute whim. The central bank of China established a research team in 2014 to consider this possibility. In August Mu had pointed out that the cryptocurrency was almost ready and could be launched during the first days of November.
Currency too can be used without internet connection, which can certainly be very convenient at times.
One of its main benefits would be the ability to avoid commercial sanctions imposed from the United States. Platforms like Wechat and Alipay would use this currency.
China wants the currency to offer the possibility of making anonymous payments, but also to control money laundering. A midpoint that might be difficult to achieve, but it can simply mean that the payments will be anonymous to everyone except the Chinese government.