7 institutions to get China’s government cryptocurrency before launch: a new competition for Bitcoin?

In the past few months, we have heard about the news of China’s central bank launching its cryptocurrency. New updates on the cryptocurrency were revealed that explain that the cryptocurrency is all set to launch.

The state-backed cryptocurrency is all set to launch, and for initial testing, it will be offered to 7 institutions in the coming months. According to a former employee of one of the institutions, Paul Schulte said that the currency would be issued to the largest bank in the world, Industrial and Commercial Bank of China. Along with this, it will also be issued to Bank of China, Agricultural Bank of China, Alibaba, and Tencent, China’s largest financial technology companies and Union Pay, the association of Chinese banks will get the cryptocurrency.

Another anonymous source revealed that the technology behind the cryptocurrency has been ready from the past 1 year and the cryptocurrency could launch as soon as November 11, known as Singles Day, one of the busiest shopping days in the whole year.

Once the currency is launched, these institutions will handle the distribution of the currency amongst 1.3 billion citizens of China and to those who are doing business in China’s fiat currency. The plan of using trusted institutions to promote the cryptocurrency is quite similar to the idea used by Facebook for its a digital cryptocurrency, Libra.

Facebook has also planned to launch the currency with the support of companies like Mastercard and Uber in the U.S., Vodafone in England and Mercado Pago in Argentina. What makes these stand apart from each other is that while Libra is in the early stage of development, China’s digital currency is set to hit the markets with its launch.

Libra is designed on a platform that can handle 1000 transactions per second, whereas China’s digital currency will be launched on a platform that allows 300,000 transactions per second. The reason behind achieving this kind of architecture is that the currency is not based on pure blockchain structure. The bank will manage the digital currency so the settlements of the transactions will be handled by the bank instead of the transactions settling in a block. PBoC will be responsible for the supply of the tokens, unlike Bitcoin, which uses an algorithm for the supply of the coins.

China plans to make the cryptocurrency global, but it’s still unclear whether any other country would be willing to use the cryptocurrency for transactions in their country. Bank of England governor made a statement about how the whole world is tired of their currency being tied with the U.S. Dollar, but China’s currency might not be the best alternative.

The U.S. and China’s trade war is a big concern as China allowed it’s the currency to hit the lowest in the 11 years. This can be harmful if the broader adoption of the digital currency is done in the future.

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Vineet Chaudhary
Vineet Chaudhary
Vineet Chaudhary is a content writer with computer applications as his background field. His interests range from writing and photography to going out for trips and rides on weekends.

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