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November 18, 2016

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PBOC plans new body on digital currency

By Leng Cheng | November 18, 2016, Friday | Print Edition

CHINA’S central bank will set up a new research institute on digital currency by year-end, the Caixin magazine reported yesterday, further reinforcing the country’s focus on developing an official sovereign digital currency.

The report follows an announcement the central bank is recruiting blockchain experts to join its Institute of Printing Science as part of its digital currency strategy.

The new research institute will be part of the Institute of Printing Science and will build a talent pool on digital currency-related technologies, Caixin said.

The People’s Bank of China is seeking six developers with a master’s degree or a doctorate in computer science, information security and cryptography to work on the design and development of digital currency-related software and hardware framework.

Qian Youcai, an Ethereum blockchain expert, is a strong possibility to join the PBOC talent pool, sources told Shanghai Daily.

PBOC didn’t respond to the Caixin report but said an official announcement about digital currency might be made within weeks.

Central banks in the UK, Russia, Canada and Australia have also shown interest in developing sovereign digital currencies.

Blockchain technology is not just useful for creating digital currencies or developing new financial technology. It can also be used for a wide variety of applications, such as tracking ownership or the provenance of documents, digital assets, physical assets or voting rights.

Sweden’s central bank said this week 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, who heads the PBOC’s digital currency research center — separate to the planned new institute — said the central bank is working on a prototype system for a sovereign digital currency. But Yao did not detail a timetable.

PBOC insiders said the bank was stepping up efforts on the “theoretical research and practical exploration” of an official digital currency in order to “be on an equal footing with foreign research, and be prepared for talent and knowledge reserves once the currency is ready to go,” Caixin said.

Market insiders in China take a wait-and-see attitude toward PBOC’s movement on a sovereign digital currency.

A source at a Beijing-based Bitcoin company told Shanghai Daily that there’s a clear difference of concept between a national digital currency and Bitcoin.

The PBOC banned Bitcoin from use in the country’s financial institutions in 2013, saying that it was not a real currency and could not become a legal form of money.

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