HCM Capital: We Could See China’s Digital Currency in 2-3 Months
- China has developed a hybrid system, which will allow its CBDC to work on already-established payment and banking infrastructures.
- China’s effort to develop a CBDC has been putting pressure on other countries to develop their own versions.
The People’s Bank of China in Beijing, China on September 3, 2015. Shutterstock
We could see the launch of China’s Central Bank Digital Currency (CBDC) in the next two to three months, Jack Lee of HCM Capital said in an interview with CNBC on 11 November.
According to HCM’s managing partner, the People’s Bank of China (PBoC) has already developed a hybrid system, called “Digital Currency Electronic Payment” (DCEP), which will allow its CBDC to work on already existing payment and banking infrastructures.
Lee further said that the PBoC has already been tracking cash movements through serial numbers on banknotes for a decade, and that blockchain will only strengthen that oversight.
He noted that the reason why China developed the DCEP system is that it already has very strong third party payment networks, such as Alipay and WeChat Pay, which it could use to distribute its CBDC to consumers quicker. Last month, China also passed a new cryptography law, which could build the foundation for its upcoming digital currency.
In another interview with CNBC on 11 November Daniela Stoffel, the Swiss state secretary for international finance, said that China’s development of a digital currency was “no surprise”, but that it is not the only government that is working on such a project.
She also stated that China’s potential digital currency has been putting pressure on other countries to develop their own version “for a while”. She said:
“Other governments now realize this is now actually really happening, and that the questions and challenges that are implied in an e-currency are now real. I hope this will lend further momentum to decisions on a global basis.”
She also said that regulators should lend a helping hand to blockchain startups in order to guide them to understand what is needed, and what is possible and what is not. In her opinion blockchain technology still has its issues, primarily with money laundering concerns, which need to be addressed.
It was also recently revealed that the PBoC will work together with the Hong Kong’s Monetary Authority on a mutual blockchain effort.
A Memorandum of Understanding (MoU) was signed between the subsidiaries of Hong Kong’s Interbank Clearing Limited and the PBoC’s Institute of Digital Currency to conduct a Proof-of-Concept (PoC) trial, which will aim to connect eTradeConnect1 and the PBoC Trade Finance Platform.
- The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
- The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
Office building of the People’s Bank of China. Flickr
- The team behind Multichain confirmed that their CEO was detained in China on 21 May, and that all of his electronic devices were confiscated by the local police.
- The CEO’s sister moved the project’s remaining funds to wallets under her control on 9 July, and several days later was also detained by the police, leaving the team with no funds.
- The current governor of Florida, Ron DeSantis, announced he is joining the race for the 47th president of the U.S. during a Twitter Spaces event on Wednesday.
- During his speech DeSantis declared his support for Bitcoin and the wider crypto space, noting that if Joe Biden is re-elected “they’ll probably end up killing it”.