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ZERO HEDGE: China’s Central Bank Poised To Legalize Digital Yuan As Part Of Sovereign Fiat Currency

Article by: Tyler Durden in Zero Hedge

China is poised to give legal backing to the launch of its own sovereign digital currency, cementing its trailblazer status in virtual currencies far ahead of other countries, after already recently experimenting with large-scale trials of actual payments by consumers, which was met with mixed results.

The South China Morning Post reported Tuesday that “The People’s Bank of China (PBOC) published a draft law on Friday that would give legal status to the Digital Currency Electronic Payment (DCEP) system, and for the first time the digital yuan has been included and defined as part of the country’s sovereign fiat currency.”

Up until very recently, the whole project has been kept very secretive even during the latest closed, limited tests among select parts of the population. Previous reports described it acting akin to well-known stablecoins in the cryptocurrency world.

The design framework for the digital yuan was released one year ago on the heels of Facebook’s ambitious but disastrous Libra token rollout after founding corporate partners split for lack of confidence in the project and on fears US federal regulators would seek to block it just as they did encrypted-messaging company Telegram’s Gram cryptocurrency.

“The draft law would also forbid any party from making or issuing yuan-backed digital tokens to replace the renminbi in the market,” SCMP continues.

Amid reports early this week that Beijing is fast moving on the digital yuan’s legal status, Bitcoin’s price hit a new 2020 high at $13,670 on Tuesday.

Within the past months the government conducted multiple trials in the cities Suzhou, Chengdu, Xiongan and Shenzhen – in the latter city conducting the largest test so far by issuing a total ten million yuan (US$1.5 million) in digital currency to 50,000 randomly selected people to use. “It was as quick as when I use Alipay,” one Shenzhen resident said in reference to one of China’s two largest mobile payment apps.

50,000 residents took part in experimental ‘red envelope’ giveaway to test its viability https://t.co/ADcTA22psW Asia Times (@asiatimesonline) October 19, 2020

To read this article in Zero Hedge in its entirety, click here.

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Although the information in this commentary has been obtained from sources believed to be reliable, The Gold IRA Company does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. The Gold IRA Company will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.