The launch of the Chinese digital currency in the financial markets will create a ‘horse race’ as described by an official of the central bank of China. Commercial banks and other financial institutions will go neck-and-neck in providing the best services using the new form of money.
China is poised to be the very first country worldwide to introduce a digitized domestic currency as financial services industries watch China unfold its project and its direct impact in the markets.
The Digital Currency Electronic Payment (DECEP) project, which is similar to Facebook’s launched digital currency named Libra, will be backed by blockchain technology.
This project will take a two-tier approach as designed by the People’s Bank of China, according to Mu Changchun, the head of the central bank’s digital currency research institute. China’s digital money will start circulating in the commercial banks and other institutions before reaching the general public for consumption.
“During the research period, and also the issuance period there will be a horse race approach,” Mu said.
“The front runner will take the whole market – who is more efficient, who can provide a better service to the public – they can survive in the future.”