As preparations begin in full swing to launch its very own cryptocurrency by the end of this year, the Chinese central bank has released a batch of initial receivers of its digital currency.
Among the first are Alibaba and Tencent – the two Chinese conglomerate giants.
When China generates news, it is bound to become big! As soon as the world’s fastest-growing economy announced the launch of its state-backed cryptocurrency, widespread speculations arose on who’s who getting their hands on the first lot.
Forbes now confirms that besides Alibaba and Tencent, Bank of China and Industrial and Commercial Bank of China, two of the world’s biggest banks by assets, are declared among the first few recipients.
The road ahead for the Chinese central bank
These institutions will then be tasked to effectively and seamlessly distribute the country’s first cryptocurrency to its 1.3 billion population and various other traders conducting business in renminbi. The much-anticipated currency is also expected to reach in the hands of spenders in the United States through extensive trade in the west.
What sets China’s cryptocurrency apart from other potential competitors in the space is the fact that while Facebook’s Libra is still battling against the US lawmakers for an overarching approval and Bank of England Governor, Mark Carney, is merely advocating the idea of a digital currency overshadowing the US dollar dominance, China is ready to launch. It is already setting out reforms on how the cryptocurrency will be distributed, transacted, and stored.
With a launch date scheduled for as early as November 11, the Black Friday of China, the central bank’s mega project is prepared to take the country by storm by executing over three hundred thousand transactions every second.
To offer a perspective, Facebook’s much-publicized project Libra is set to offer one thousand transactions per second. The only catch is that China’s supremely efficient cryptocurrency is based on a centralized framework, which means that the Chinese central bank holds the highest authority over the currency.
To conclude, it is difficult to predict whether China’s soon-to-be-launched virtual currency will be able to overturn the global economic model and shift the focus from the US dollar to the digital renminbi. That said, it could propel a broader adoption of digital currencies in the world.