Huang Qifan, vice president of the China International Economic Exchange Centre, which is believed to be China’s top think tank with connections to the government, confirmed that the People’s Bank of China is close to rolling out its digital currency, and probably would become the first central bank to do so. The new digital currency will be called DCEP (digital currency electronic payment).
At the Inaugural Bund Financial Summit of 2019 in Shanghai, Huang noted that the People’s Bank of China has been studying DCEP for five or six years already. The new currency will be able to “achieve real-time collection of data related to money creation, bookkeeping, etc, providing a useful reference for the provision of money and the implementation of monetary policies,” according to Huang.
Huang claimed that the payment and settlement methods between enterprises and countries need to be reshaped. As for now, existing interbank systems like SWIFT are “outdated, inefficient, and costly.” Moreover, these instruments could become tools for the USA to achieve financial leadership.
Apart from that, Huang commented on Facebook’s Libra, which, as he argued, would not succeed. Neither Bitcoin nor Libra could successfully challenge sovereign currencies because “the value of the currency cannot be stabilized and it is difficult to truly form social wealth,” as he said.