Chinese Digital Yuan Will Favor Payments And Retail: Ex PBoC Head

The digital currency approach by China with its Chinese digital yuan are getting better and better accepted by the media, the latest crypto news show. According to a former head at the People’s Bank of China (PBoE), the national cryptocurrency approach is set to favour international payments and domestic retail systems.

Zhou Xiaochuan who is the president of the Chinese Finance Association and former governor of the People’s Bank of China (PBoC) spoke about this, outlining two major types of implementations of central bank digital currencies (CBDCs) while speaking at the 2019 Caixin Hengqin Forum.

According to reports from the local news outlet Caixin on November 26, the Chinese digital yuan is seen by the former PBoC head as a major part of an electronic payment-oriented domestic retail system (as the first type) as well as an international remittances system for settlements between financial institutions (as the second type).

The ex PBoC head and the longest serving official at this position is very influential in the financial world in China. He hinted that the country will continue along the established path for its own digital yuan which is dedicated to domestic retail systems and payment.

The famous banker also emphasized the risks associated with CBDCs, outlining that a fiat currency serves as a “symbol of national sovereignty.” In that manner, central banks and ones with power should be very careful when choosing their direction. If they don’t choose well, they may be led into a credit crisis, he noted.

The news comes right after China was reported to have completed its plans for the Chinese digital yuan project in August 2019. The PBoC also clarified that the bank did not have any specific launch date for its digital currency – and that the financial institution needs time to research and evaluate the initiative in detail.

Even though the People’s Bank of China (PBoC) is trying to develop its Chinese digital yuan initiative, it recently improved its crackdown on crypto-related operations in the country, too. As a statement from November 21 shows, the bank warned that it was taking action against all entities involved in trading cryptocurrencies such as Bitcoin (BTC). This hit the markets hard and was apprently part of the speculations leading to the crash of BTC and other altcoins.