China Pulls Plug On Stablecoin Stories

Reading Time: 2 minutes

Calling reports of its issuing a stablecoin or digital Yuan “inaccurate speculation,” the People’s Bank of China has denied that it will be doing any such thing by November.

Last month and since, several outlets conducted reporting based on circulating information that China would soon have a digitized version of its currency.

Digital Yuan By November: Fake News

It’s currently unclear where stories of the alleged stablecoin originated, although Forbes was among the first to report on the matter. The Chinese government has apparently issued no official statement saying when it will launch a digital Yuan.

This publication speculated on how government-issued stablecoins could impact the issuance of privately-backed stablecoins such as Tether and TrueUSD.

One factual account on the subject are quotes by former PBoC governor Zhou Xiaochuan in which he suggested both that commercial banks could issue a digital yuan and that building a digital yuan would make the currency stronger with new competitors like Facebook Libra entering the fold.

Xiachuan made these comments in July, and stories of a Chinese stablecoin circulated in August.

However, these stories, combined with the launch of Bakkt, have failed to invigorate an unusually calm crypto market.

Mild excitement set in when the price finally fell several hundred dollars last week, but things have returned to normal since then. The price has generally hovered around $10,000 for months now.

The People’s Bank Clarifies

Chinese newspaper the Global Times debunked the western crypto media reports, writing:

“The clarification came after speculations said that the PBC will launch a digital cryptocurrency as early as November 11, and the cryptocurrency will be issued to China’s four biggest commercial banks, Alibaba, Tencent and UnionPay in the initial stage. […] The PBC will introduce a two-prong operation system for the digital currency, adopt a centralized management model, and continue to use a current operation structure for cash services, which is through joint efforts of the PBC and commercial institutions, the statement explained.”

The “clarification” reported on by the Global Times underlines the fact that China does plan to issue a digital yuan, just that the details have been mixed up by eager crypto reporters.

China will be the largest economy yet to issue a digital version of its currency. Technical details of the program have not been disclosed to the public.

At this point, it’s unclear if a traditional blockchain structure will be used to issue and control the currency, or if something more centralized will be preferable.