China's central bank is close to launching its own digital currency
China's central bank is close to launching its own digital currency after five years of research and development in the area, according to a senior official.
Mu Changchun, deputy director of the People's Bank of China's (PBOC) payments department, made the comments at the China Finance 40 Forum held Saturday in Yichun, northeast China's Heilongjiang Province.
The PBOC set up a research team in 2014 to explore the possibility of launching a digital currency to cut the costs of circulating traditional paper money and improve the efficiency of monetary policy.
However, he did not mention exactly when the currency will be released.
Mu said the PBOC would stick to a centralized management of its digital currency and use a "two-tier" system for its issuance, meaning the currency will firstly be issued by the central bank to commercial banks or other financial institutions, and then to the public via them.
He also said that the digital currency would not solely rely on blockchain technology as current blockchain technology would not be able to handle transaction volumes in China.