AliPay, Tencent, and Union Pay among the first to receive China’s gov-backed cryptocurrency
Ex-Head of financial strategy for China’s Construction Bank, Paul Schulte, confirms that the anticipated Chinese government-backed digital currency is one step closer to its release, and we get to know some of the first institutions to utilize the newly-issued currency.
Two of the largest banks in the world, the Industrial and Commercial Bank of China, and the Agricultural Bank of China are among the first participants in what is now officially called the DC/EP, or Digital Currency/Electronic Payments.
The list includes, but is not limited to, tech giants and financial companies based in China, such as Alibaba, Tencent, and Union Pay, an association of Chinese banks.
The selected companies will receive the digital currency and are expected to start using it within their respective networks as soon as November 11, 2019, on China’s Singles Day, or simply the country’s busiest shopping day, and analogous to the western “Black Friday”.
Another spokesperson directly involved in the development of the digital currency confirmed Schulte’s list and added that an eighth company is set to receive a chunk of the initial wave of the highly-anticipated gov-backed crypto, but the previous government employee refused to uncover the company’s identity.
In addition, the anonymous source said that the new cryptocurrency, now dubbed as DC/EP, was ready-to-go since late last year, but the government insisted on double-checking all possible scenarios subject to the currency’s functionality and integrity before releasing it in the ‘wild east’ in this case.
The recipient companies are expected to distribute the cryptocurrency to over 1.3 Chinese netizens, as well as to external enterprises already doing business using China’s fiat currency.
The project’s insider also said that the People’s Bank of China, the central bank behind the cryptocurrency, aims to spread the freshly-generated digital asset system all the way to the western markets, including the US, via various partnerships with correspondent banks in the west.
It seems that Facebook’s Libra shool the global monetary policy-making scene, influencing a number of government-level institutions to attempt to issue their own digital currencies, that just might be considered as the new global reserve currencies in the future, killing the multi-decade dominance of the US Dollar.
Similar to the Chinese strategy on distributing its government-backed cryptocurrency, Facebook also relies on Libra’s integrity, various central bank currencies, and industrial tech giants such as Mastercard, Vodafone, and Uber.
Last week, Mark Carney, governor of the Bank of England talked about a new digital currency that could and should eventually eliminate the need for US Dollar circulation.
Just a couple days later, the Chief Economist at the New Development Bank of China, Li Daokui, spoke of a similar vision, where digital payment systems such as Libra, AliPay, and WeChat would dominate the future economy, while the US Dollar will be long gone before we realize it.
Interestingly enough, Schulte believes that China’s DC/EP will be the first central-bank issued cryptocurrency to hit the global market, as it’s already set to be rolled out, while Libra is stuck on a series of negotiations and hearings due to its complex Zuckerberg-style terminology, and Carney’s idea, is just that. An idea.