Seven institutions to receive China’s state-backed digital currency

China’s central bank becomes the first central bank to issue the state-backed digital currency. According to the former employee of one of the selected institutions, the following seven institutions will receive the digital currency-

• Industrial and Commercial Bank of China
• China Construction Bank Corporation
• Bank of China,
• Agricultural Bank of China,
• Alibaba,
• Tencent, and
• Union Pay.

Due to China’s complex economy with a vast territory and a large population, the Central bank has adopted a two-tier framework. This framework or system targets to improve the accessibility of digital currency and increase public willingness to use.

As part of this system, the selected institutions will receive the digital currency who will be responsible to disperse to Chinese citizens and others doing business in China’s fiat currency.

Time of launch

As per the news in Forbes, the digital currency could launch as soon as 11th Nov 2019, one of China’s biggest shopping day ‘Singles Day’, popular among young Chinese people that celebrate their pride in being single.

The holiday has become the largest offline and online shopping day in the world. Last year Alibaba made a billion dollars in sales in the first 90 seconds of a 24-hour shopping event.

The technology behind the digital currency has been in research and development since 2014. It was recently announced ‘ready to deploy’ by the deputy director of People’s Bank of China, Mu Changchun.

Why the move to create the digital currency

According to 2017 statistics, Alipay had a 54.26% share of the third-party payment market in mainland China.

As of March 31, 2018, the number of Alipay users reached 870 million. It is the world’s number one mobile payment service organization and the second-largest payment service organization in the world. 

This digital currency will provide China’s commercial banks the opportunity to build its own platform and compete with mobile payment businesses like Alipay and WeChat pay who currently have captured lion’s share in digital payment.