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China’s central bank serious about developing digital currency

CHINA'S central bank will set up a research institute on digital currency by the year end, Caixin reported today, giving further signals on its attempt to develop national official digital currency after the latest recruitment on blockchain experts.

The new institute will be established on the basis of Institute of Printing Science affiliated to the People's Bank of China (PBOC), Caixin said, and will add positions to build a talent pool on digital currency-related technologies.

Shanghai Daily reported earlier this week that PBOC is seeking six developers with Master’s or doctoral degree in computer science, information security and cryptography next year to work on the design and development of China's official digital currency.

Qian Youcai, an expert of blockchain-based smart contract platform Etheruem, is highly possible to join the talent pool of PBOC, sources told Shanghai Daily.

PBOC didn't immediately respond to Shanghai Daily's verification on Caixin's report, but mentioned that an official announcement related to digital currency might be coming in weeks.

Central banks in UK, Russia, Canada and Australia have also showed interests in developing blockchain-based digital currencies these years, as the blockchain technology is supposed to support an efficient digital money system that does not carry the cost of handling cash and transparent transactions.

Earlier today, Sweden's central bank said that it is considering issuing a digital currency called “e-krona” within two years in the Nordic nation where cash transactions are declining.

Yao Qian, the central bank official who leads the digital currency research center, said that PBOC is working on the prototype system of national digital currency during a recent media interview. But Yao didn't release any timetable for the out coming.

Insiders from PBOC said the bank is stepping efforts on the "theoretical research and practice exploration" of the official digital currency, in order to “be on an equal footing with foreign research, and be prepared for talents and knowledge reserves once the currency is ready to issue," Caixin said.

Market insiders in China take a wait-and-see attitude towards PBOC's movement. Sources in a bitcoin company based in Beijing told Shanghai Daily that there's a clear difference of concept between a national digital currency and an encrypted digital currency such as bitcoin.

Bitcoin is the most popular digital currency worldwide so far, which is not tied to a bank or government, and allows users to spend money anonymously.

"The concept of national digital currency has to be highly centralized in order to replace the fiat money in cash and strengthen the currency control," the source said.

"This could be good news for bitcoin industry, since PBOC could guide the regulation of digital currency and leave bitcoin as an alternative to legal tender," the source added.


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