Central bank of China to launch digital currency within months in fight to retain control over monetary policy

The People's Bank of China will roll out China's sovereign digital currency, DC/EP, as early as November this year, distributing it to seven institutions including Alibaba, Tencent, and the four largest banks in the world, two separate sources told Forbes.

Paul Schulte, a former executive at China Construction Bank and Lehman Brothers Hong Kong, said the currency will initially be issued to the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China, Alibaba, Tencent, and Union Pay.

A second, unnamed source reportedly working on DC/EP backed up Schulte's claim, adding that a mystery eighth institution could also receive the coin and that the digital currency has been ready to launch for over a year.

China began research for a sovereign digital currency in 2014, but the state now seems to have been pushed to the wall in its plans to launch-not only by the threat cryptocurrencies like Bitcoin may pose to China's monetary sovereignty and ability to monitor its citizens, but also by the announcement of corporate stablecoins like Facebook's Libra.

As a one-party state economy traditionally reliant on domestic consumption, strict currency controls, and the success of its many state-owned enterprises, China would likely be one of the least receptive markets for such a coin.

Together, mobile payment providers Alipay and WeChat dominate up to 90 percent of market share in China, and the PBOC's new digital currency could lure back cash deposits and customers, the South China Morning Post reported.

In light of China's unique economic situation, the PBOC just weeks ago unveiled a "Dual delivery system" for DC/EP intended to accelerate adoption amongst the nation's vast population.

"The People's Bank of China is the upper level and the commercial banks are the second level. This dual delivery system is suitable for our national conditions. It can use existing resources to mobilize the enthusiasm of commercial banks and smoothly improve the acceptance of digital currency."

The seven institutions should receive the coin as early as Nov. 11, and will immediately be tasked with dispersing the currency to China's billion-plus citizens, the anonymous source told Forbes.

DC/EP will at first replace China's M0 supply and according to PBOC patents seen by Bloomberg could allow the central bank to monitor all transactions.