Wednesday , December 1 2021
China to Expand Digital Currency Experiments - Central Bank Vice Governor

China to Expand Digital Currency Experiments – Central Bank Deputy Governor



With over 900 million internet users and the largest digital economy in the world, China planned introduction of an official digital currency is the latest step in its digital transformation move.

China’s Digital Currency Electronic Payment (DCEP) is a digital currency that is based on cryptographic technology. Generally speaking, it can be considered as the world’s first Central Bank Digital Currency (CBDC) and will be issued by China’s central bank, the People’s Bank of China.

China will expand digital yuan experiments to more cities, but there is no specific timetable for its official rollout, central bank vice governor Li Bo told an annual gathering on Sunday of top Chinese and foreign policymakers, executives and academics.

China is one of the frontrunners in the global race to launch central bank digital currencies to modernise financial systems, ward off the threat from cryptocurrencies like bitcoin and speed up domestic and international payments.

Last year it launched testing in several cities including Suzhou, Shenzhen, Chengdu and Xiong’an.

Li said testing had shown that the issuance and distribution mechanism of the digital yuan, or e-CNY, are compatible with the existing financial system, and help minimize the impact on the banking sector.

China will continue to improve e-CNY’s ecosystem, enhance its security and reliability, and set up a set of legal and regulatory framework, Li said at the Boao Forum in the country’s southern island province of Hainan. The forum was cancelled last year due to COVID-19.

The digital currency will be used by Chinese citizens as well as foreign visitors to the Beijing Winter Olympics to be held next year, he said.

Li also said the focus of developing the e-CNY will be mainly for domestic use, while cooperating with other countries to find a solution for cross-border payments in the long run.

 

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The yuan internationalisation will be a natural process, and China’s goal is not to replace the U.S. dollar or other global currencies, but let the market make choices, Li added.

Zhou Xiaochuan, China’s former central bank governor, told the same forum that China’s initial motivation for developing the digital yuan was for domestic retail payments, not for cross-border payments, which still face many complex issues.

China Digital Yuan Currency

The digital yuan is being tested in China for the past several months. With pilot programs running across the country, China has not identified a timeline for the full roll-out of the digital asset.

However, Deputy Governor Li Bo mentioned that the central bank is looking at increasing the testing scope of the digital yuan.

The central bank will be looking to test cross-border payments of the digital yuan for preparations towards the upcoming Winter Olympics scheduled for 2022. The digital currency will be offered as a payment method for cross-border payments for domestic and overseas users, including athletes, Li said.

The central bank digital currency (CBDC) will be tested with members of the Sansha City government. The latest trial will run for two weeks, and looks to raise awareness for the digital yuan. The government is also offering an impressive 15% discount for every 100 yuan spent within the island.

China to Expand Digital Currency Experiments – Central Bank Vice Governor

With over 900 million internet users and the largest digital economy in the world, China planned introduction of an official digital currency is the latest step in its digital transformation move.

China’s Digital Currency Electronic Payment (DCEP) is a digital currency that is based on cryptographic technology. Generally speaking, it can be considered as the world’s first Central Bank Digital Currency (CBDC) and will be issued by China’s central bank, the People’s Bank of China.

China will expand digital yuan experiments to more cities, but there is no specific timetable for its official rollout, central bank vice governor Li Bo told an annual gathering on Sunday of top Chinese and foreign policymakers, executives and academics.

China is one of the frontrunners in the global race to launch central bank digital currencies to modernise financial systems, ward off the threat from cryptocurrencies like bitcoin and speed up domestic and international payments.

Last year it launched testing in several cities including Suzhou, Shenzhen, Chengdu and Xiong’an.

Li said testing had shown that the issuance and distribution mechanism of the digital yuan, or e-CNY, are compatible with the existing financial system, and help minimize the impact on the banking sector.

China will continue to improve e-CNY’s ecosystem, enhance its security and reliability, and set up a set of legal and regulatory framework, Li said at the Boao Forum in the country’s southern island province of Hainan. The forum was cancelled last year due to COVID-19.

The digital currency will be used by Chinese citizens as well as foreign visitors to the Beijing Winter Olympics to be held next year, he said.

Li also said the focus of developing the e-CNY will be mainly for domestic use, while cooperating with other countries to find a solution for cross-border payments in the long run.

The yuan internationalisation will be a natural process, and China’s goal is not to replace the U.S. dollar or other global currencies, but let the market make choices, Li added.

Zhou Xiaochuan, China’s former central bank governor, told the same forum that China’s initial motivation for developing the digital yuan was for domestic retail payments, not for cross-border payments, which still face many complex issues.

The digital yuan is being tested in China for the past several months. With pilot programs running across the country, China has not identified a timeline for the full roll-out of the digital asset.

However, Deputy Governor Li Bo mentioned that the central bank is looking at increasing the testing scope of the digital yuan.

The central bank will be looking to test cross-border payments of the digital yuan for preparations towards the upcoming Winter Olympics scheduled for 2022. The digital currency will be offered as a payment method for cross-border payments for domestic and overseas users, including athletes, Li said.

The central bank digital currency (CBDC) will be tested with members of the Sansha City government. The latest trial will run for two weeks, and looks to raise awareness for the digital yuan. The government is also offering an impressive 15% discount for every 100 yuan spent within the island.


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