China’s central bank is developing a digital currency

China’s central bank is in efforts to develop own digital currency that is cheaper to handle and easier to trace, even after boldly banning trading of bitcoin and other cryptocurrencies. During a March political gathering in Beijing, former central bank chief Zhou Xiaochuan said the country’s digital money “must ensure smooth running and financial stability policies” while at the same time protecting consumers.  

The Digital Currency Research Institute of the People’s Bank of China (PBOC) is now seeking cryptography talent and has went ahead to publish those job posts Wednesday this week as part of its annual hiring for next year.

According to the job description, the organization is looking for four employees with computer science, cryptography or microelectronics training, and who hold a master’s degree or above, and preferably with experience in blockchain and big data. It is the first time the bank specified it is seeking cryptography experts although not the first time to advertise computer science positions.

This is another initiative by the bank after forming the Digital Currency Research Institute last year. However, the bank begun initiatives to launch a digital currency way back in 2014. The move contrasts with government’s initiatives to ban crypto trading, crypto exchanges and any form of digital currency in the country. Nevertheless, the country is noted as having one of the largest mining pools in the world.   

In March this year, PBoC outlined its agenda for 2018and said that one of the priorities was innovation and promoting research and development of the central bank’s digital currency, which could replace physical Renminbi notes.  

Yao Qian, who leads the research at the People’s Bank of China (PBOC) has said last year that the currency can drive down transaction costs, increase efficiency of monetary policies and extend financial services to rural areas. He said that the development of digital economy needed central bank-issued electronic currency more than ever. However, the bank wanted a centrally-controlled digital currency probably because it will be easier to trace. Therefore is likely that the digital currency would first be tied to fiat rather than a decentralized value system before replacing physical Renminbi notes.  

Some are of the opinion that the digital currency could emulate a stable coin that based on an algorithm that ensures it keeps its value by pegging it to a stable fiat such as US dollar or it could be pegged to a Consumer Price Index (CPI) or the Renminbi.

David Kariuki

David Kariuki likes to regard himself as a freelance tech journalist who has written and writes widely about a variety of tech issues that affect our society daily, including cryptocurrencies (see cryptomorrow.com and coinpedia.org); climate change (cleanleap.com), OpenSim and virtual reality (see hypergridbusiness.com). He is currently pursuing a MSc in Environmental Management at Open University. He does write here not to offer any investment advise but with the intention of informing audience, and articles in here are of his own opinion. Anyone willing to use any opinion here as advise to invest in crypto should obviously take own responsibility and accountability of their losses (or benefits) thereof. You can reach me at eqariu@gmail.com or david@cryptomorrow.com