China recently got a shot in the arm when it was announced that Facebook would be launching its Libra project in the coming years. This announcement from the Western Social Media giant – banned in China – made the People’s Bank of China spill the beans on their own project.
It has long been known that China has been working on a cryptocurrency, which they are calling DC/EP — an abbreviation for Digital Currency/Electronic Payments — but not much information has been known about its timings, or makeup.
That is until they broke the silence and announced it could be pushed forward to launch as early as November this year; partly to get first to market ahead of Facebook and Libra. In fact, it has come to a point where the Chinese offering is starting to bear a striking resemblance to Libra.
Because of the similarity in the coin, the two have started having a bit of cross over. Libra began with an association of well-known companies to help launch and distribute the currency – from Uber to PayPal, Visa, and Stripe. China’s DC/EP now apparently will also have a basket of companies – and banks – to help get the currency up and running.
According to a Forbes article, the PBoC is giving its first round of central bank digital currency to online retail giant Alibaba, Internet giant Tencent, five banking organizations and one other unknown entity.
The members of this cohort, according to Forbes’ source, will be responsible for dispersing the DC/EP tokens to China’s citizens and others participating in business, more so, there are even thoughts that the Chinese may look to distribute tokens to buyers in the United States too, via correspondent banks, but not immediately.
It is a smart move on behalf of the often controlling, secretive, and all-conquering central bank of China. They are now well aware that Libra could be a threat to their own launch, and they would lose the control they desire if Libra is better distributed across the world.
So, by trying to be first to market against a similar competitor, and by leaning on popular traditional institutions to distribute the coins, there is enough time and space for the cryptocurrency to integrate across their country and settle as the number one choice.
It has even been noted by a director at Renmin University of China, Yang Dong, that Libra was indeed the motivating factor for the China coin designers to involve non-governmental entities in the issuance process, as well as development.