China is still in the process of developing a state digital currency, the chief of a government-funded blockchain research center has said.

According to a report by Shanghai Securities News Thursday, Zhang Yifeng, head of the China Banknote Blockchain Research Center, said the research and development of a digital fiat currency is on-going in China, adding that an estimated launch schedule remains unknown.

A government-funded organization, the center was formed under the China Banknote Credit Card Industry Development, which is fully state-owned by the China Banknote Printing and Minting Corporation, a direct subordinate of the People’s Bank of China (PBoC), the country’s central bank.

The comments also follow previous remarks by PBoC’s former governor Zhou Xiaochuan, who said in a press conference earlier in March that the development of a central bank-backed digital currency is “inevitable,” while not ruling out the option of building such a digital currency on distributed ledger technology.

Zhang’s comments also provide clarification on the subject after his previous denial of recent rumors that have spread across the Chinese media suggesting that the country has already launched a central bank digital currency. Earlier this week during at a financial technology summit in Hangzhou, Zhang called such rumors fake news, but did not provide further detail.

In his latest statements, Zhang said even if with the launch of a central bank digital currency, it will not replace the existing monetary mechanism immediately. Rather, he anticipates both fiat and digital currency will be used in parallel.

Zhang further argued that value as a payments tool is central to a state digital currency. Bitcoin and ethereum are not entitled to be called digital currency, he said, given their role in storing value has largely overtaken their payments role.

Chinese yuan image via Shutterstock

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