First results after years of preparation
On 5th January China’s central bank expressed confidence in an official press release at its working conference in Beijing. After the start of the trial run in December 2019, the first differences to the traditional crypto currencies are now becoming apparent. As a state bank, the People’s Bank of China is controlling the new currency very closely. In addition, commercial institutions are paying the reserves that fully cover the government’s digital currency.
In the press release, the responsible parties make the following statement: “The People’s Bank of China, under the strong leadership of the Central Committee of the CPC and the State Council, and in view of the complex situation of a significant increase in domestic and foreign risk challenges, is maintaining a sound monetary policy, is resolutely fighting major financial risks, is continuously deepening structural reforms on the financial side, is continuously improving financial management and services, and is not forgetting its original intentions. Taking into account the mission, the courage to accept really hard work, the work has achieved remarkable results”.
Keeping the banking system liquid
As far as monetary policy is concerned, the digital yuan already seems to be bringing benefits. Despite downward pressure on the economy, the financial situation is said to have improved. In 2020, banks are expected to continue to develop socialism with Chinese characteristics. In addition, those responsible are also relying on the countercyclical adjustment of monetary policy in order to eliminate financial risks. It is not yet known which crypto wallet will be used for the Chinese national currency. However, a separate development is conceivable.