As the launch of China’s central-backed digital currency is looming, the bank has decided to distribute the crypto to seven banks and tech giants, according to a Forbes report.
Among the names that are about to receive the first batch of the digital currency are banking giants like 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. In addition, tech behemoths Alibaba and Tencent will also receive the central bank-issued digital currency.
Another anonymous source told the publication that there is an eighth player in line to receive the digital currency. However, the name of the entity is not disclosed.
Dubbed as Digital Currency/Electronic Payments (DC/EP), the People’s Bank of China is expected to launch its cryptocurrency as soon as on November 11, which is famous for being the busiest shopping day in the country.
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According to the publication’s source, the institutions with the crypto will be responsible for dispersing the cryptocurrency to 1.3 billion Chinese citizens and also other business users using renminbi.
With the strategic distribution of the digital coins, the central bank is also looking to circulate it to the United States buyers using the banks’ international ties.
A centralized crypto
DC/EP is very similar to Facebook’s upcoming digital currency Libra. The central bank’s project is much more efficient than the social media company’s as it can handle 300,000 transactions per second, according to a Chinese central bank official, compared to Libra’s capacity of 1,000 transactions per second. However, the efficiency comes at a cost to the decentralized architecture, as the design of DC/EP is much more centralized.
Apart from China, the central banks of many other countries are also looking into digital coins. Finance Magnates recently reported that the central bank of Rwanda is researching the feasibility to launch its own cryptocurrency.