China may have clamped down on Bitcoin, initial coin offerings and cryptocurrency mining, but that hasn't stopped the government from readying its own digital token.
According to media reports, the People's Bank of China is gearing up to issue its own cryptocurrency with Mu Changchun, deputy director of the PBOC’s payments department saying at an event this past weekend that its "close to being out."
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The officials didn't elaborate on the timing of the debut of the cryptocurrency. He did say that the digital currency would be a replacement for cash that's already in circulation and would support the yuan's circulation.
China to maintain control with its digital token
While cryptocurrency is made possible because of decentralized, blockchain platforms, China plans to issue its own to gain more control rather than cede some it. Citing patents People's Bank of China registered, Bloomberg reported with the currency consumers would have to install a mobile wallet and exchange yuan for the digital token. The digital currency could then be used to make payments and receive them. The central bank in China would be able to see and track each and every time any money is sent or received. The People's Bank of China has been developing its digital currency for about five years now and joins Sweden's central bank, which is also researching the idea of issuing its own digital token.
The move on the part of China comes as regulators around the globe are expressing skepticism about Facebook's upcoming digital token dubbed Libra. Ever since Facebook released a white paper detailing its plans, leaders across the globe including President Donald Trump, have expressed issues with it.
World leaders have issues with cryptocurrency
Federal Reserve Head Jerome Powell, Bruno Le Maire, the French Finance Minister, and Mark Carney, the Bank of England Governor have all expressed criticism of Libra. In July President Trump took to Twitter to rail against Libra, saying in a series of Tweets that the unregulated nature of cryptocurrency makes it rife for illegal activities such as drug trade. He went on to say Libra will have "little standing or dependability," and that if Facebook and other companies want to become a bank "they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International."
While China is creating its own cryptocurrency it has also been one of the more aggressive countries in terms of clamping down on bitcoin. It was one of the first to ban initial coin offerings, block cryptocurrency exchanges and has put restrictions on mining for digital tokens.