China’s digital currency will create a “horse race” when it is launched as commercial banks and other institutions compete to provide the best services using the new form of money, a People’s Bank of China (PBOC) official said yesterday.
China is preparing to be the first nation to roll out a digitized domestic currency, a development that is being closely watched by the world’s financial services industries, though few details are currently available.
Akin to Facebook Inc’s proposed Libra digital currency and other cryptocurrencies such as bitcoin, the Digital Currency Electronic Payment (DCEP) project would be powered partially by blockchain technology.
PBOC would adopt a two-tier approach with its project, Mu Changchun (穆長春), head of the bank’s digital currency research institute, told a forum in Hong Kong.
It would first issue the currency to commercial banks and other institutions, which would then resend it to the general public.
“During the research period, and also the issuance period, there will be a horse-race approach,” Mu said.
“The front-runner will take the whole market — who is more efficient, who can provide a better service to the public — they can survive in the future,” he said.
Mu added that the PBOC was “technology neutral,” but he anticipated that if a front-runner takes the lead, “the technology they use will be adopted by other parties.”
As the DCEP is designed to substitute existing coins and paper money, holders of the currency would not receive interest payments, which would mean there would be no implications for inflation or monetary policy, Mu said.
While the project has some similarities to Libra, it seems likely to allow Chinese regulators even closer oversight over money flows than they currently have.
The main motivation behind the project is China’s desire to protect its capital borders in the face of fears that newer global payment systems and advanced technology could facilitate illegal cash flows, market observers said.
Mu reiterated Chinese regulators’ concerns about Libra, saying that if a country had capital management policies, the cryptocurrency “was definitely a threat to the country’s currency sovereignty.
He added that any other “stable coins,” digital currencies whose value is pegged to that of other assets or currencies, would have to abide by all of Beijing’s foreign exchange rules if they were to be accepted in China.
TECH TITAN: Pandemic-era demand for semiconductors turbocharged the nation’s GDP per capita to surpass South Korea’s, but it still remains half that of Singapore Taiwan is set to surpass South Korea this year in terms of wealth for the first time in more than two decades, marking a shift in Asia’s economic ranks made possible by the ascent of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). According to the latest forecasts released on Thursday by the central bank, Taiwan’s GDP is expected to expand 4.55 percent this year, a further upward revision from the 4.45 percent estimate made by the statistics bureau last month. The growth trajectory puts Taiwan on track to exceed South Korea’s GDP per capita — a key measure of living standards — a
Samsung Electronics Co shares jumped 4.47 percent yesterday after reports it has won approval from Nvidia Corp for the use of advanced high-bandwidth memory (HBM) chips, which marks a breakthrough for the South Korean technology leader. The stock closed at 83,500 won in Seoul, the highest since July 31 last year. Yesterday’s gain comes after local media, including the Korea Economic Daily, reported that Samsung’s 12-layer HBM3E product recently passed Nvidia’s qualification tests. That clears the components for use in the artificial intelligence (AI) accelerators essential to the training of AI models from ChatGPT to DeepSeek (深度求索), and finally allows Samsung
READY TO HELP: Should TSMC require assistance, the government would fully cooperate in helping to speed up the establishment of the Chiayi plant, an official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its investment plans in Taiwan are “unchanged” amid speculation that the chipmaker might have suspended construction work on its second chip packaging plant in Chiayi County and plans to move equipment arranged for the plant to the US. The Chinese-language Economic Daily News reported earlier yesterday that TSMC had halted the construction of the chip packaging plant, which was scheduled to be completed next year and begin mass production in 2028. TSMC did not directly address whether construction of the plant had halted, but said its investment plans in Taiwan remain “unchanged.” The chipmaker started
MORTGAGE WORRIES: About 34% of respondents to a survey said they would approach multiple lenders to pay for a home, while 29.2% said they would ask family for help New housing projects in Taiwan’s six special municipalities, as well as Hsinchu city and county, are projected to total NT$710.65 billion (US$23.61 billion) in the upcoming fall sales season, a record 30 percent decrease from a year earlier, as tighter mortgage rules prompt developers to pull back, property listing platform 591.com (591新建案) said yesterday. The number of projects has also fallen to 312, a more than 20 percent decrease year-on-year, underscoring weakening sentiment and momentum amid lingering policy and financing headwinds. New Taipei City and Taoyuan bucked the downturn in project value, while Taipei, Hsinchu city and county, Taichung, Tainan and Kaohsiung
RSS