China is working on a new digital currency. A senior official at China's central bank said the cryptocurrency will bear similarities with Facebook's Libra.

China's Cryptocurrency Could Be Ready As Early As Nov. 11

Mu Changchun, deputy director of the People's Bank of China's payments department, announced last month that the digital currency was almost ready and it could be ready as early as Nov. 11.

China's central bank set up a research team as early as 2014 to explore the feasibility of launching the country's own digital currency. Analysts think China accelerated the release of the digital money following the announcement of Facebook that it will launch the digital coin Libra.

Similar To Facebook's Libra

Mu said that China's new digital currency will bear some similarities to Facebook's Libra in design albeit it would not be a direct copy of the social media company's digital currency.

Facebook announced it will launch Libra in June. The digital currency is backed by a reserve of real-world assets, which include bank deposits and government securities, and is held by a group of custodians. Libra is structured in a manner that it can foster trust and stabilize prize.

He added that the coin can be used across major payment platforms such as Alipay and WeChat. Mu also said the tokens would be as safe as the paper notes issued by the central bank and can be used without the need for an internet connection.

China's Objectives For Releasing Official Digital Currency

The main goal for creating China's official digital currency is to facilitate the use of yuan globally. Mu said that the development of the coin can protect the monetary sovereignty and legal currency of China amid expanding commercial applications of these currencies.

"In addition to its advantage of reducing costs [of transactions], the digital [yuan] would still be a centrally controlled sovereign currency and so [to be successful] it would require the same level of trust that the holder has for the central bank and government agencies," said Daniel Wang, chief executive of blockchain start-up Loopring.