China’s Digital Currency Electronic Payment (DCEP) cryptocurrency project is set to create a “horse race” when it is launched, according to news reports.
The central bank says the country’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.
China is preparing to be the first country to roll out a digitised domestic currency.
Reuters reports that the development is being closely watched by the world’s financial services industries. Details, however, remain limited.
Like Facebook’s Libra, and other cryptocurrencies such as Bitcoin, the DCEP project will be powered partially by blockchain technology.
The People’s Bank of China says will adopt a two-tier approach with its project. It will first issue the currency to commercial banks and other institutions, who will then resend it to the general public.
“During the research period, and also the issuance period there will be a horse race approach,” Mu Changchun, the head of the central bank’s digital currency research institute, 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.”
It has previously been reported that China’s e-currency would give the government widespread new powers to fight crime and manage the economy, while also raising privacy concerns.