The People’s Bank of China has completed a trial run for its iteration of digital currency. Different banks in China participated in transactions involving the currency. They are a world leader in testing and implementing this technology. After ironing out a few kinks, the People’s bank plans to have a country-wide rollout. It will be a legal tender and backed by the government. Since, the digital currency will be floating in the money market, the bank will closely monitor it to avoid inflation.
I believe this is a good thing for fintech. Physical monies have been becoming irrelevant since the credit card. We deposit our physical money into banks and are able to have a digital representation of it on our devices. This digital currency will implement aspects of blockchain technology. Banks will be able to see the transaction history and detect fraudulent activity. They will also be able to account for all digital currency in the market when determining cash levels.
Look out in the next few years for banks adopting a similar currency. It will move finance into a new era.
What is this digital currency called? I’m curious as to how it is similar to/different from Bitcoin, and how both will fluctuate in value and respond to each other once this new digital currency is on market.