The People’s Bank of China (PBoC) is making active plans to launch the nation’s Digital Currency Electronic Payment System (DCEP). The digital currency will first be tested with commercial banks, according to a tweet on October 28, 2019.
China’s PBoC Set to Launch DCEP
Despite placing a blanket ban on bitcoin trading and initial coin offerings (ICOs), the world’s most populous nation, China is still interested in creating its own blockchain-based cryptocurrency.
In a video released by the People’s Bank of China (PBoC), the apex bank has hinted that it is putting the finishing touches to the blockchain-based Digital Currency Electronic Payment System (DCEP), which it plans to make available to local commercial banks shortly.
Reportedly, the PBoC has been working on the virtual currency for quite some time now. However, the bank decided to accelerate the entire process after Mark Zuckerberg’s Facebook announced plans to launch Libra.
Mu Changchun, the deputy director of the PBoC has hinted that DCEP will be powered by a dedicated distributed ledger and could be launched before the end of this year.
How DCEP Works
According to the PBoC, the DCEP will come with two layers. The first layer will facilitate interactions between the PBoC and commercial banks in China and enable them to issue DCEP tokens.
The second network layer will facilitate interactions between participating banks and holders of the DCEP token, including businesses.
Interestingly, sources close to the development have also revealed that the DCEP will be partially centralized.
Users will enjoy anonymity when they transact with other DCEP users; however all transactions will be visible to the PBoC, giving the government absolute control over people’s financial activities.
Crypto Twitter Reacts
The news of DCEP’s impending launch has attracted a lot of reactions from crypto enthusiasts on Twitter, with some predicting that the virtual currency could further boost the price of bitcoin (BTC), while some others have argued that DCEP would be backed by the yuan, as such it would have no positive impact on BTC.
Already, China’s President, Xi Jinping’s endorsement of distributed ledger technology (DLT) and the passing of the cryptocurrency bill has given the bitcoin price a massive boost.