China announced that its state-backed, central bank issued digital currency (CBDC) won't be decentralized and will only partially use a distributed ledger, causing doubts over whether it can be classed as a cryptocurrency.
China's CBDC will be established through a two-tier system: it will be issued by the People's Bank of China (PBoC), while the country's commercial banks will provide the second-tier service of transmission through the financial system.
Mu Changchun, deputy director of the PBoC, revealed the launch of the digital offering at last weekend's China Finance 40 event. He said:
This two-tier system is suitable for our national conditions. It can use existing resources to support and develop commercial banks and smoothly promote digital currency.
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