Currently, it is illegal in China to conduct an ICO or open a cryptocurrency exchange. DCEP would be distributed to all commercial banks affiliated to the central bank and to large fintech companies such as Tencent and Alibaba to be used in WeChat pay and Alipay.
DCEP is a digital currency that would run on a centralized private network, unlike other cryptocurrencies. The central bank of China would have full control over the digital currency. DCEP is all set to become the first major central bank-banked digital currency.
Huang Qifan, Chairman of the China International Economic Exchange Center, in a speech during the Bund Summit, said that the People’s Bank of China has been studying DCEO for five or six years and is likely to be the first central bank in the world to launch a digital currency.
… #PBOC has been studying #DCEP for five or six years, and is likely to be the first central bank in the world to launch a digital currency," said Huang Qifan, Vice President of #China Center for International Economic Exchanges, in #BundSummit #stablecoin #digitalcurrency pic.twitter.com/2M2lKKAWoA
— China Finance 40 Forum (CF40) (@ChinaFinance40) October 28, 2019
Earlier, Chinese President Xi Jinping endorsed blockchain technology and urged the country to assume the role of leadership in this field. China also passed a cryptography law that would go into effect from 1st January of the next year. Many from the crypto community have criticized the idea of a centralized government-backed digital currency as it would become easier for the government to invade the financial privacy of people.