The People’s Bank of China (PBoC) released a statement on March 29 saying that it is taking measures to promote the “central bank’s digital currency,” indicating that the world’s most populous nation is continuing to develop a national cryptocurrency.
PBoC deputy governor Fan Yifei was quoted in the statement as saying that one of the main tasks for the PBoC in 2018 is to “solidly promote research and development of the central bank’s digital currency” while also carrying out “rectification of various types of virtual currency” in his speech at the 2018 PBoC national video conference on March 28.
Bloomberg reported that the PBoC was developing its own national cryptocurrency as far back as February 2017. Former People’s Bank of China governor Zhou Xiaochuan revealed in a media briefing on March 9 that the new digital currency would be tentatively named “digital currency electronic payment,” or DCEP, and would be released in 2019.
China banned initial coin offerings (ICOs) and cryptocurrency exchanges in September 2017. However, instead of offering more freedom and convenience to consumers, the PBoC’s national cryptocurrency project may have much more to do with China’s policy of strict capital controls and support for the Yuan, China’s national currency.
Last year, China restricted foreign exchange purchases to RMB 100,000 (or about $15,900) per bank account, with an annual limit on foreign currency purchases set at roughly $50,000 per person. Norwegian blockchain media CCN reports that cryptocurrencies were among the most popular methods for large holders of Yuan to purchase foreign currencies, skirting the official ban.