China's money may not go digital just yet (via Pixabay).
China's money may not go digital just yet (via Pixabay).
Asia & Australia

Newspaper says Chinese central bank cryptocurrency launch not imminent

An English-language tabloid under the Chinese Communist Party’s official newspaper denies Forbes report of a Libra-killer

By  / August 29, 2019 /

A publication run by China’s ruling Communist Party has denied reports that the nation’s central bank is on the verge of launching a cryptocurrency.

On August 27, Forbes’ Michael del Castillo reported that the People’s Bank of China (PBOC) intended to launch its own renminbi-denominated cryptocurrency as soon as November 11—Singles Day—a major online shopping day in China far larger than even the U.S.’s Cyber Monday.

Citing a well-connected researcher, anonymous sources, and Mu Changchun, deputy director of the Paying Division of the PBOC, the article described a two-tier digital currency based on a permissioned blockchain. It would be distributed through eight large institutions, including tech giants Alibaba and Tencent, and several of China’s largest banks.

On August 28, The Global Times, an English-language tabloid published by the People’s Daily, the Chinese Communist Party’s official newspaper, denied that report via Twitter. It wrote: “Refuting media reports of launching a state-backed cryptocurrency in the coming months, #China‘s central bank termed them as ‘inaccurate speculation.’”

Dovey Wan, founding partner of Primitive Ventures, noted on Twitter that day that Tencent News had also denied the Forbes report. She quoted it as saying, “[b]oth (sources in the report) are not reliable, totally baseless guesses.”

The identified source quoted by del Castillo was Paul Schulte, a former head of global strategy for China Construction Bank who now runs bank-focused Schulte Research. He identified his former employer as one of the eight institutions that would distribute the Digital Currency/Electronic Payment (DC/EP) cryptocurrency.

Among the reasons Mu cited in a speech—given earlier this month—for launching a virtual currency were keeping monetary policy firmly in the central banks’ hands while distributing the institution’s risk, and discouraging the use of bitcoin (BTC) and other cryptocurrencies.

Facebook’s recent proposal to launch a private cryptocurrency called Libra has been attacked by politicians, regulators, and central bankers. Aside from Facebook’s massive trust issues, they are concerned that with 2.7 billion customers worldwide, Libra could challenge central bank-issued fiat currencies and directly impact the world economy.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.