China will involve Alibaba and Tencent in the distribution of its digital currency

Paul Schulte, who was head of finance strategy at China Construction Bank until 2012 and is now an independent researcher, said that the world's largest bank, Industrial and Commercial Bank of China, its former employer, Bank of China, Agricultural Bank of China, the two largest financial technology companies in China, Alibaba and Tencent, as well as the Association of Chinese Banks Union Pay, will receive digital currency.

A separate source related to the development of China's national digital currency confirmed that seven organizations will be able to access the new asset during the launch phase. In addition, eight other institutions are being considered for inclusion in the first-priority beneficiary group, he said, refusing to clarify the details.

According to the source, the technology that will form the basis of the digital currency, was ready last year. He said the launch is planned no later than November 11, when China celebrates Bachelor's Day and holds mass sales.

Participating organizations will be responsible for the distribution of digital currency among 1.3 billion Chinese residents and other renminbi accountants, the source added. China's central bank hopes its digital currency will eventually be used in the US and other Western countries.

According to Mu Changchun, deputy director of the payment and settlement decisions division of the People's Bank of China, the national digital currency will be suitable for 300,000 transactions per second, while the peak on the previous bachelor's day was 92,771 transactions per second. This will be facilitated by abandoning the pure architecture of public blockchain. The digital currency is intended to replace physical banknotes and coins in circulation, but not yuan, which are in digital bank accounts.

Information on the distribution of digital currency by the People's Bank of China through a network of trusted institutions is consistent with the earlier description of Changchun's two-tier operating structure.