Our upcoming digital yuan has features not offered by Facebook Libra, this comment was made by the Chinese central bank new digital currency chief .
The Shanghai Securities News reported that Changchun Mu who was previously the deputy director of the payments and settlement division of the People’s Bank of China (PBoC) recently stepped into the lead role at the Digital Currency Research Institute.
Recently, there was a publication by Mu on PBoC’s digital currency obviously being carried out in a secret office which is away from the bank’s Beijing headquarters as he described it as a digital currency and electronic payment tool with “value characteristics.”
“Though it is just a digital form, but it's functional attributes are exactly the same as paper money,” Mu stated.
Furthermore, he compared it with Facebook’s Libra as he set out some of the digital currency’s technical aspects.
According to Mu, Provided a user’s mobile phone has a wallet, the digital currency can be transferred to another person by placing the two phones in physical contact. PBoC’s digital yuan will possibly get transferred between users without an account and without a mobile or internet network.
It is presumed that this feature is enabled by near-field communication (NFC).
“Even Libra can’t do this,” Mu stated.
No bank account is needed to operate PBoC’s digital currency and is “free from the traditional bank account system control,” Shanghai Securities News reports.
He further stated that it allows users to preserve their privacy when using the system.
The digital currency however, will be delivered via commercial banks like fiat currency as well. The banks must open accounts with the PBoC and buy the token at 100 percent value. Thereafter, users may open digital wallets for the digital currency through commercial organizations or banks.
The main purpose for developing the digital currency according to Mu, is “planning ahead” to protect monetary sovereignty and China’s legal currency.
That may confirm the hint that the sudden rush of development at the central bank could be as a result of the emergence of Facebook Libra
Meanwhile, former People’s Bank of China (PBoC) governor Zhou Xiaochuan said that “Libra has introduced a concept that will impact the traditional cross-border business and payment system, he had stated in July and as such "China should make good preparations and make the Chinese yuan a stronger currency,” Zhou concluded.
Credits: Daniel Palmer.
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