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China’s Central Bank To Distribute Its Own Cryptocurrency To Banks And Tech Companies

29 Aug 2019

As the launch of China’s central bank-backed cryptocurrency looms near, the central bank has decided to distribute the cryptocurrency to seven banks and tech companies.News portal Finance Magnates reported that the recipients of the initial batch of the cryptocurrency were China Construction Bank, the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China, and the Chinese banking association Union Pay. Apart from that, Alibaba and Tencent will also receive the central bank-issued digital currency.Earlier this month, Mu Changchun, Deputy Chief in the Payment and Settlement Division of the People’s Bank of China (PBOC), stated recently that central bank would launch its own currency.At the time, the senior official had said, “People’s Bank digital currency can now be said to be ready.” Changchun claimed that the central bank has access to a prototype version of the digital currency and that the PBOC has fully adopted and integrated the use of blockchain technology into its infrastructure. He further added that they would not be relying on ‘pure’ blockchain technology, citing difficulties in scaling.While this news makes the rounds, another interesting development took place in China in July. Bitcoin was recognized as ‘virtual property’, in a court room in China. According to a judgement, Bitcoin is legal to own in China and indicates to holders that they will be protected by the country’s legal system in disputes.At the time, Changchun also provided details on how to distribute the digital currency through a ‘two-tier system’. He said, “The People’s Bank of China is the upper level and the commercial banks are the second level. This dual delivery system is suitable for our national conditions. It can use existing resources to mobilize the enthusiasm of commercial banks and smoothly improve the acceptance of digital currency.”

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