A new cryptocurrency— the move places China way ahead of the US and Europe in the cryptocurrency stakes.
According to a report on Forbes, China plans to issue a new crypto currency transferable from the renminbi (yuan). The currency, which is being referred to as DC/EP (Digital Currency/Electronic Payments) will be distributed by some of China’s largest companies: Alibaba, Tencent, The China Construction Bank, The Industrial and Commercial Bank of China, The Bank of China, The Agricultural Bank of China and Union Pay. In practice, this means the companies will buy the currency from the Chinese government before distributing it.
According to Forbes, Mu Changchun, head of China’s cryptocurrency research lab and deputy director of the Paying Division of the People’s Bank of China (PBOC), favours the idea of a cryptocurrency running in parallel with the Chinese currency, as this will “consolidate China’s national currency sovereignty, ensure that the central bank maintains control over monetary policy affecting the currency, increase the likelihood of people using the currency, distribute the risk of having all the authority directly in the hands of the central bank and encourage competition between the organisations that receive the cryptocurrency.”
China has repeatedly called for an alternative to the dollar previously suggesting that the default currency could be like the IMF special drawing rights, a system of conducting international trade using a basket of currencies.
Ever since then, the US has been a massive beneficiary of the current system. The end of dollar hegemony is surely inevitable, with China likely to become the biggest economy in the world in the next decade and India the second biggest later this century.