Despite insisting the direction of Beijings financial future lay with blockchain not bitcoin, it would appear China is covertly looking to beef up its rumoured plans to launch a national cryptocurrency as it has been revealed that the government has signed a deal with phone giant Huawei.It is understood the coin research department of the Shenzhen-based manufacturer has been drafted in by the Peoples Bank of China following talks between the banks governor Fan Yifei and Huaweis top brass yesterday. Although cagey about details of the deal, the bank confirmed it had signed a strategic cooperation agreement.

While the agreement may well fit into the current blockchain-only script, the changing narrative behind Chinas public stance on cryptocurrency is causing concern among many international observers.

Last month, Chinas president Xi Jinping appeared to back bitcoin and other cryptocurrencies before the government stepped in on his behalf a few days later to backtrack on comments the leader had made.

Officials were quick todenyany endorsement of cryptocurrency, instead insisting that China would be pulling out all the stops to embrace and develop blockchain the technology which underpins bitcoin rather than pursuing crypto adoption.

The scenes played out against the backdrop of whispers and rumours that China has indeed been engaged in developing a crypto version of the Yen behind the cloak of blockchain.

Ever since Facebook unveiled its controversial plans for a global digital currency called Libra earlier this year, it is believed China has been furiously working behind the scenes to develop its own state-issued e-currency.

With Facebook banned in China, the idea that this huge global social media network could create what many in Beijing view as a new world order in finance is a notion which has spurred China on to ensure it creates a nationwide form of digital money before Libra envelops the planet, assesses Hong Kong-based financial analyst Tan Leung Wai.

China is desperate to protect its sovereign currency from what it sees as a massive threat in the shape of something which has the potential to one day become a sovereign currency throughout the world.

Mr Wai also suggested that while Huawei may be publicly acknowledging its involvement with the Peoples Bank of China, it was likely that the smart phone manufacturer was the tip of the iceberg.

Authorities in Beijing will, without any doubt, have called upon the services of many of the countrys major industry leaders to assist with ensuring the protection of Chinas financial independence, so to think that Huawei is acting alone here is slightly ridiculous, he added.

The rumours from Beijing are that several other big names are involved in talks to get cryptocurrency moving in China behind the cloak of blockchain.

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CRYPTOCURRENCY: China calls on Huawei to help with crypto ambitions - Express