Central Bank Of China To Distribute Cryptocurrency Through Seven Leading Institutions

Cryptocurrencies are edging closer to mainstream adoption, and the Chinese government is about to launch its much spoken about state backed digital asset. The last few months have seen China’s central bank step up their efforts to develop the cryptocurrency as they try to stay ahead of Facebook’s Libra.

The cryptocurrency is expected to be launched in the next few months, and it is rumored that they are going to launch the crypto asset through seven institutions. Paul Schulte, the former global head of financial strategy at China Construction Bank said that there are seven top financial institutions in China that will be the initial holders of the state’s cryptocurrency.

The institutions through which the cryptocurrency will be launched are the Bank of China, Alibaba, the Agricultural Bank of China, Union Pay, the Industrial and Commercial Bank of China, Tencent, and an association of Chinese banks. These institutions are industry leaders in the financial sector in China and launching the cryptocurrency through them will help distribute digital assets faster.

According to a separate source that is involved in the development of the cryptocurrency, an eighth company is being considered for addition to the list of firms which will receive the cryptocurrency first. The source spoke on condition of anonymity and refused to divulge the name of the company. The source works for the Chinese government and they said that the technology backing the digital assets has been ready since last year. They said that current plans are to launch the cryptocurrency on November 11, which is China’s busiest day.

Easy distribution of cryptocurrency

Making use of the top financial institutions as instruments of the distribution of the state backed digital asset will ensure that it reaches as many Chinese citizens as possible in no time. The government aims to have 1.3 billion Chinese citizens who use the renminbi make use of the digital currency.

China aims to avail their digital currency to other countries such as the United States where many people engage in trading cryptocurrencies. Distribution to other countries will be done through banks in those countries which are affiliated with Chinese banks. If international markets are successfully accessed, it would put China’s digital currency in position to be a forerunner in cryptocurrency trading worldwide.

Leading the pack

Although China already had plans to launch its digital currency, the process was sped up after Facebook’s Libra was announced. The digital currency that reaches the international market first has the potential to completely revolutionize financial systems, and could even replace the US dollar as the main currency used worldwide.

If the Chinese government does meet the 11 November target and launches its digital asset, it would have a compound effect on crypto trading. Digital asset traders are growing in number daily, and such a massive project would see more people engage with crypto assets. China’s central bank would become the first central bank in the world to have a digital currency, and this would put them right at the front in the race to control the new financial system.