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PBOC commentary: China must be the first to issue CBDC

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on Sep 21, 2020
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  • China still leads the CBDC race, although it recognizes the importance of being the first to launch it.
  • The country has the advantage, the technology, and even the feedback it needs to break the dollar's rule.
  • Meanwhile, the PBOC continues to create an ecosystem that would support digital yuan.

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The People’s Bank of China (PBOC) recently published a commentary in which it noted that China must be the first nation to launch the CBDC. The goal has not changed — China aims to offer its digital yuan and internationalize its own currency. As a result, it hopes to reduce the world’s dependence on the US dollar-based payment system.

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The battle for CBDC dominance continues

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The People’s Bank of China made the announcement in its magazine, called China Finance. It stated that the rights to create and control a cryptocurrency will become a new battlefield, with sovereign countries being major competitors.

The issuance and circulation of cryptocurrencies will also significantly change the current international finance, the bank said.

It then stressed that China has many opportunities and advantages over others when it comes to issuing its own coin. As such, it stands to reason that it should increase the speed and make sure that it will ‘seize the first track.’

China prepares the ecosystem for digital yuan’s release

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Chinese media also recently reported that some of the major state-run banks are starting to conduct tests with digital wallets. The move shows that China is not only serious about introducing its digital yuan, but also that it might be rather close to its official release.

Meanwhile, it continues to collect data from its digital currency tests, and China Finance article argues that the feedback will further enhance monetary policy transmission, and lead to the economic recovery after the pandemic.

The country will also need to establish an entirely new payment system network in order for the yuan to take over the USD and become the dominant force.

Lastly, the bank’s cryptocurrency research unit also filed around 130 crypto patent applications, including all kinds of different areas, from issuance, application, circulation, and more.

This is what will eventually form a supply chain that would support the launch of the coin.

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