Amid its currency drop below the “psychological barrier” of 7 and the intensifying trade war with the US, China—with its ban on cryptocurrency trading—surprised the world by publicly revealing a plan to release its own to replace M0 or cash in circulation.
According to various media reports, the People’s Bank of China—the country’s central bank—is almost ready to release its own cryptocurrency after five years of work though without specifying a launch timeframe.
The cryptocurrency will rely on a two-tier split, with the People's Bank on top and commercial banks below to help deal with the sheer size of China's economy and population, Mu Changchun, deputy director of the PBOC’s payments department, was quoted by Engadget as saying during an event held by China Finance 40 Forum over the weekend in Yichun, Heilongjiang Province.
Mu was also cited in a Bloomberg report as saying that the central bank intends to have the cryptocurrency replace M0, or cash in circulation, rather than M2, which would generate credit and impact monetary policy.
China since early 2018 has blocked all websites related to cryptocurrency trading and initial coin offerings (ICOs)—including foreign platforms—to quash the market completely.
