Tech and Banking Giants First to Receive China’s Sovereign Cryptocurrency
Alibaba, Tencent, Union Pay, and other large financial institutions are reported to be the the first receivers of China’s sovereign cryptocurrency initiative, as per Forbes, August 27, 2019. Paul Schulte, the ex-head of global financial strategy at the China Construction Bank is the main spruce behind the information. A second source confirmed that seven large Chinese institutions will be the first to receive the CBDC.
Centralized Fiat Crypto
China is using the power of large institutions to propel the reach of its digital currency initiative. According to sources acquainted with the situation, China will utilize the distribution capacity of the largest banks and payment providers to spread their digital currency to 1.38 billion people.
Money is essentially supplied by central banks through commercial and industrial banks, be it in the form of investments or loans. China is utilizing this same model, but this time they are embracing the private payments sector in order to have a wider dispersion of the digital currency.
This offering was supposedly ready last year and could launch as early as November 11, 2019, which also happens to be the day of China’s largest shopping festival.
The People’s Bank of China (PBoC) hopes that this currency will reach the Western civilization through their partnerships with banks and financial institutions in the United States and Europe.
This news broke just days after Bank of England’s Mark Carney stated that a worldwide digital fiat can threaten the global reserve status of the dollar. Is this China launching their attack on the dominance of the dollar?
Efficiency at the cost of Privacy
Unfortunately, since this is money issued by an authority, it is almost guaranteed to have a centralized ledger that allows the Chinese government to keep a track of everyone’s transactions.
Given that these wallets will require KYC, every transaction done by an individual canbe tied to their identity.
This also means the government has a newer and stronger license to do whatever they please – not that they haven’t till now.
The upside of this is that it will make payments cheaper and faster. Users will pay less fees and transactions will have near instantaneous confirmation.