China Take Lead in State-backed Digital Currency ‘Race’

China Take Lead in State-backed Digital Currency ‘Race’

Only days after the Bank of England Governor, Mark Carney, suggested to his fellow central bankers that a private or state-run digital currency could serve as a global counterbalance to the US dollar, news agency Forbes broke the story that China may release their own version as early as November 11.

Galvanised by the prospect, notable industry figures such as co-founder of Morgan Creek Digital Assets, Anthony Pompliano, and Binance Exchange CEO Changpeng Zhao – who is more widely known by his moniker CZ – took to social media to ponder whether the prospect of a digital Renminbi would spark a race between nations or whether China would be waved through into pole position.

Barreling Forward

Forbes quote Paul Schulte, an independent researcher who has previously worked as global head of financial strategy for China Construction Bank, as saying “China is barreling forward on reforms and rolling out the cryptocurrency…[and]…it will be the first central bank to do so.”

Although yet to be confirmed by official Government sources, Forbes suggest that China’s central bank will issue their state-backed digital currency to some of the largest banks in the world – the Industrial and Commercial Bank of China, the Bank of China, and the Agricultural Bank of China – along with prominent public-facing companies such as Alibaba, Tencent, and Union Pay.

The timing of the currency rollout appears crucial for although November 11 is Armistice Day in the West, the date signifies Singles Day in China which equates to the world’s busiest shopping day of the year, meaning any digital currency would receive rapid dispersement throughout China’s population.

With such a prospect on the near horizon, speculation of which country will lead the transformation is understandable, yet others have already concluded that the race is not just between digital currencies produced in unchecked quantities by nation states but also similar offerings from companies, such as Facebook’s Libra project, and open sourced projects with a capped supply like Bitcoin.

Few should now have doubts that a shift is coming for as Mark Carney stated plainly in his speech on Friday “…we need to change the game.” 

With the three factions – state, corporate, open – currently jostling in a quasi-official currency Mexican standoff, any move on the scale predicted for Singles Day would, at the very least, announce to the world that the monetary change has come.