China’s Central Bank Digital Currency (CBDC) is all set for a launch after 5 years of arduous research and development since 2014. China’s prejudice against the cryptocurrency and its attempt to introduce the digital currency is a paradox in disguise. This tends to an apparent conclusion, that, Chinese Government wanted to set up a Digital Currency system which would wholly operate under the State’s control. The next strong reason being, it did not want the discrepancies of Cryptocurrency to creep into the nation, also make the economy more self-reliant and reduce its interdependence on Foreign technology.
Akin to Facebook’s proposed Libra digital currency and other cryptocurrencies such as bitcoin, the Digital Currency Electronic Payment (DCEP) project will be powered partially by blockchain technology.
The People’s Bank of China will adopt a two-tier approach with its project, Mu Changchun, the head of the central bank’s digital currency research institute, told a forum in Hong Kong. It will first issue the currency to commercial banks and other institutions, who will then resend it to the general public.
The main motivation behind the project, market observers say, is China’s desire to protect its capital borders in the face of fears that newer global payment systems and advanced technology could facilitate illegal cash flows.
China’s plans to create a sovereign digital currency might be aimed towards eradicating the need for U.S.-controlled payment systems like the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Speaking at the Bund Financial Summit in Shanghai, Huang Qifan the vice chairman of the China Center for International Economic Exchanges (CCIE) declared that China was looking to create a cross-border renminbi (RMB) liquidation system independent of SWIFT. "The tendency for the U.S. to weaponize the current international payment processors means that China needs to seek alternatives. Commenting on the matter". Qifan said
Western powers, including the United States, need to take this movement of money to a digital format very seriously, once that gets traction, and it will, It will replace the world banking and financial systems as that we now know, AND control.
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