China’s central bank has completed a five-year project to develop a digital currency that can be processed at a speed which is fast enough for it to be used in a retail environment, a senior People’s Bank of China (PBOC) official has revealed.

The Central Bank Digital Currency (CBDC) “can now be said to be ready,” Mu Changchun, deputy director of the bank’s payment and settlement division, explained.

The digital currency uses a two-tier operating system, with the PBOC acting as the upper level (tier one) and the country’s commercial banks as the second level (tier two).

This approach will improve accessibility, both spread and reduce risk, avoid disintermediating commercial banks and “give full play to the resources, talents and technological advantages of commercial organisations,” he said.

“This dual delivery system is suitable for our national conditions. It can use existing resources to mobilise the enthusiasm of commercial banks and smoothly improve the acceptance of digital currency.”

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