China’s plans to launch a state-backed cryptocurrency may eliminate the need for bank accounts, a new study has found.
A report was published in Binance, a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies. Since early 2018, Binance is considered as the biggest cryptocurrency exchange in the world in terms of trading volume, is an overview of what the central bank’s digital currency is expected to look like and how it will be compared to Bitcoin and Libra from Facebook.
Based on the details provided by the entities linked to the Central Bank of China, the cryptocurrency will be backed up by traditional currency reserves and will allow people to transfer funds even if they do not have a bank account.
Earlier this month, a senior official with the People’s Bank of China PBOC said, the cryptocurrency was about to appear, although no specific dates have been set for its official disclosure.
The report also showed how the unspecified cryptocurrency could be used to support and improve China’s already expanding surveillance network.
Unlike current cryptocurrencies, central authorities will be able to gather information, and identities are likely to be linked to individual portfolios, making them completely unknown, unlike Bitcoin.
Cryptocurrency is supposed to require users to own smartphones, even if they do not have bank accounts. Current estimates indicate that about half of China’s 1.4 billion people own smartphones.
The new Chinese currency could compete with the new Facebook, largely because Facebook is blocked in China, giving the government a possible market monopoly.
Earlier this year, in a new letter sent to Facebook executives, US lawmakers formally asked the social networking giant to stop all Libra currency development.